If Microsoft stock has a constant net return each year, then the value of a share of Microsoft stock is determined by
a. subtracting Microsoft's total costs from its total revenue.
b. multiplying the annual net income by the number of shares.
c. dividing the annual net income from the asset by the interest rate.
d. both a and b above.
C
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By the method of Lagrange multipliers, the optimal value of the Lagrange multiplier equals the:
A) marginal utility of income. B) marginal utility of each good. C) marginal utility per dollar spent on the last unit of each good. D) A and B above E) A and C above
(Consider This) For people that use commitment contracts to motivate achievement of a goal, people have the choice of their penalty money (from failing to reach the goal) to go to either charities they like or charities they hate (anti-charities). From a
behavioral economics perspective: A. designating an anti-charity should be more effective because loss aversion will provide additional motivation. B. designating a charity (versus an anti-charity) should be more effective because it avoids all potential for loss. C. it shouldn't matter whether one designates a charity or an anti-charity. D. self-interest biases generally keep people from choosing the anti-charity.