If the Demand for Softballs Increases, One Could Expect the Demand

question 193

Multiple Choice

If the demand for softballs increases, one could expect the demand for leather to increase.This is attributable to the

• A)opportunity cost of producing softballs.
• B)marginal productivity principle.
• C)reduction in the cost of production of softballs.
• D)derived demand for an input.

---

Definitions:

Salvage Value

The anticipated salvage valuation of an asset upon the completion of its effective duration.

Operating Costs

The expenses associated with the day-to-day functions of a business, including costs for rent, utilities, maintenance, and administration.

Discount Rate

The interest rate used to discount future cash flows to their present values, reflecting the opportunity cost of capital.

Project Profitability Index

A measure used to evaluate the attractiveness of an investment or project, calculated as the present value of future cash flows divided by the initial investment cost.