A pizza shop owner needs to buy a pizza oven and is deciding between a new one and a used one. If he buys an older used one it will generate $4,000 of net income for 3 years. If he buys a new one it will generate $5,000 of net income for 4 years. If the
interest rate is 10%, what is the difference in value between the two ovens? (Assume that each year's revenue is received at the end of the year.)
a. $793.83
b. $2,577.10
c. $6,252.25
d. $2,777.78
e. $1,000
Answer: C
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An indifference diagram has movies on the vertical axis and sodas on the horizontal axis. As the consumption of sodas increases, the marginal rate of substitution ________ and the indifference curve becomes ________
A) falls; flatter B) falls; steeper C) rises; flatter D) rises; steeper
Refer to the information in Figure 16.5 below to answer the question(s) that follow.
?Figure 16.5Figure 16.5 shows the marginal benefits of emitting pollution for the only two chemical companies in an industry, Alpha Chemicals and Beta Chemicals. Before any tax on pollution emissions is imposed, each company views pollution as being free.Refer to Figure 16.5. The government decides to impose a tax on pollution emissions to cut total emissions in this industry in half, and based on this decision it has set the tax at $100 per ton of emissions. Following the implementation of this tax, the total amount of tax revenue collected by the government from this
tax will be A. $5,000. B. $7,500. C. $10,000. D. $20,000.