Question Details

A change in the level of an economic activity is desirable 



1. The net present value of an investment represents
A.	an index of the desirability of the investment
B.	the expected contribution of that investment to the goal of shareholder wealth maximization
C.	the rate of return expected from the investment
D.	a and b only
2. A change in the level of an economic activity is desirable and should be undertaken as long as the marginal benefits exceed the ____.
A.	marginal returns
B.	total costs
C.	marginal costs
D.	average costs
E.	average benefits
3. Marginal revenue (MR) is ____ when total revenue is maximized.
A.	greater than one
B.	equal to one
C.	less than zero
D.	equal to zero
E.	equal to minus one
4. factor(s) which cause(s) a movement along the demand curve include(s):

A.	increase in level of advertising
B.	decrease in price of complementary goods
C.	increase in consumer disposable income
D.	decrease in price of the good demanded
E.	all of the above

5.	A price elasticity (ED) of 1.50 indicates that for a ____ increase in price, quantity demanded will ____ by ____.
A.	one percent; increase; 1.50 units
B.	one unit; increase; 1.50 units
C.	one percent; decrease; 1.50 percent
D.	one unit; decrease; 1.50 percent
E.	ten percent; increase; fifteen percent



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