A $130,000 investment in new equipment this year will increase your firm's profits by $50,000 in each of the next 3 years. What is the net present value of this investment if your firm's opportunity cost of capital is 10 percent?

The notion that when the price of an input falls, a firm's marginal cost curve shifts down and overall production increases so that more of every input is employed is known as

a. the output effect. b. the substitution effect. c. the input effect. d. the cost effect.

Politicians and citizens may often choose policies that reduce economic efficiency because they are perceived as "fairer."

a. True b. False Indicate whether the statement is true or false