If the Present Value of the $1,000 to Be Received

question 6

Multiple Choice

If the present value of the $1,000 to be received in one year is $800,the interest rate is

• A)25 percent per year.
• B)8 percent per year.
• C)10 percent per year.
• D)12 percent per year.
• E)125 percent per year.

---

Definitions:

Long-run Average Total Cost

The per unit cost of production when all inputs, including capital, are variable, assuming optimal efficiency.

Economies of Scale

Describe the cost advantages that enterprises obtain due to the scale of their operations, typically resulting in reduced costs per unit with increased output.

Long-run Average Total Cost

The average cost per unit of output when all inputs, even physical capital, are adjustable, over a sufficient time period.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, characterized by a reduction in average cost per unit when output is increased.