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1. The current price of scrap steel is $6/pound, but it was 4.87/pound just 4 years ago. What is the average inflation rate for scrap steel?
a) 5.64%
b) 5.36%
c) 5.46%
d) 5.52%
2. Assuming in the last year of a project that Revenue was $100,000, Expenses were $50,000, Working Capital Release was $15,000, and a machine was sold for $30,000, which cost $80,000 new and had a book value of $10,000, what is the expected end of year after tax cash flow? (Corporate taxes are 40%)
a) $53,800
b) $67,000
c) $81,300
d) $75,000
Use the aggregate expenditure model to explain the following statements from the opening news article.
These forecasts for the Internet creating “perfectly competitive” markets were based on the competitive model we have presented in this chapter. Do you think the Internet has helped create more competitive markets or less? Why?
Analyze the determinants of the price elasticity of demand and determine if each of the following products are elastic or inelastic:
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Compute the deadweight loss if the U.S. imposes a tariff of 25 cents per bottle of imported wine.
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