Suppose an Instructor Takes Off Points for Students Coming Late

question 39

Multiple Choice

Suppose an instructor takes off points for students coming late to class. He then finds that the number of late arrivals has risen. This could have happened because the:

• A) money price of late arrivals declined.
• B) shadow price of late arrivals rose.
• C) shadow price of late arrivals declined.
• D) teacher did not fine the students monetarily for arriving late.

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Definitions:

Net Cash Flow

The difference between a company's cash inflows and outflows during a specific period, indicating its liquidity position.

Initial Cost

The amount of money spent to acquire or invest in a significant item, asset, or project at the time of purchase or onset.

Capital Budgeting

The process of planning and evaluating investments in fixed assets and projects with long-term implications for the organization's financial health.

Long-Term Investments

Assets intended to be held for more than one year, such as stocks, bonds, or real estate, aimed at generating long-term returns.