Question

QUESTION 15

1. A positive rate of time preference means that:

   	a.	as time progresses, people value consumption more than saving.
   	b.	consumption in the future and consumption today are positively related.
   	c.	consumption in the future is valued less than current consumption.
   	d.	consumption in the future is more important than current consumption.
   	e.	current consumption is valued equally as consumption in the future.

5 points   

QUESTION 16

1. Which of the following is not a role of an entrepreneur?​

   	a.	​Improving existing products
   	b.	​Introducing new production methods
   	c.	​Introducing new ways of doing business
   	d.	​Selling the stocks of a company
   	e.	​Creating new products

5 points   

QUESTION 17

1. If you are to receive a payment of $200 at the end of the first year and a payment of $250 at the end of the second year at a market interest rate of 5 percent, the present value of this income stream is:​

   	a.	​$417.23.
   	b.	​$475.37.
   	c.	​$450.00.
   	d.	​$400.37.
   	e.	​$490.13.

5 points   

QUESTION 18

1. _____ is an asset pledged by a borrower to a bank when he or she takes a loan.​

   	a.	​Owner’s equity
   	b.	​A mutual fund
   	c.	​Collateral
   	d.	​A hedge fund
   	e.	​A bond

5 points   

QUESTION 19

1. Everything else remaining unchanged, if consumers decide to increase their rate of saving the _____.

   	a.	quantity of loanable funds demanded will increase
   	b.	supply of loanable funds will increase
   	c.	quantity of loanable funds supplied will increase
   	d.	demand for loanable funds will decrease
   	e.	supply of loanable funds will decrease

5 points   

QUESTION 20

1. The difference between income and consumption is known as _____.​

   	a.	​rent
   	b.	​profit
   	c.	​opportunity cost
   	d.	​investment
   	e.	​saving

5 points   

QUESTION 21

1. ​ One problem associated with intellectual property is that _____.

   	a.	​the original owner has difficulty preventing non-paying beneficiaries from using the property
   	b.	​the cost of producing it usually exceeds the benefit from it
   	c.	​encryption software creates monopoly power
   	d.	​only one person can use it at a time
   	e.	​the patent system reduces incentives to create new intellectual property

5 points   

QUESTION 22

1. Discounting involves:​

   	a.	​computing the present value of an investment, given the current rate of inflation.
   	b.	​converting current dollar amounts into future value.
   	c.	​computing the future value of an investment, given the current rate of inflation.
   	d.	​computing the present value of an investment for an expected rate of inflation.
   	e.	​converting future dollar amounts into present value.

Answer 1

Q15. Option d.

Q16. Option d.

Q17. Option a. PW = (200/((1+0.05)^1))+(250/((1+0.05)^2)) = $417.23

Q18. Option c. In order to avail loans banks takes collateral as guarantee

Q19. Option b. As it savings would be supplied as loan able funds

Q20. Option e. whatever is left after consumption is saving

Q21. Option c. Patents gives monopoly power to owners

Q22. Option a. At the current inflation rate, it tells about the present value