A Promise of a $100 Payment to Be Received One

question 10

Multiple Choice

A promise of a $100 payment to be received one year from today is:

• A) more valuable than receiving the payment today.
• B) less valuable than receiving the payment two years from now.
• C) equally valuable as a payment received today if the interest rate is zero.
• D) not enough information is provided to answer the question.

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Definitions:

Productive Efficiency

A situation when an economy or entity is operating at its maximum capacity, utilizing resources effectively to produce goods and services at the lowest possible cost.

Productive Efficiency

A situation where an economy or entity cannot produce more of one good without affecting the production of another good, utilizing all resources optimally.

Purely Competitive

A market structure characterized by a large number of sellers offering identical products, where no single seller can influence the market price.

Least-Cost Rate

An economic principle that emphasizes minimizing production or operation costs while achieving a specific output level.