You Can Continue to Use Your Less Efficient Machine at a Cost

question 69

Multiple Choice

You can continue to use your less efficient machine at a cost of $8,000 annually for the next five years.Alternatively, you can purchase a more efficient machine for $12,000 plus $5,000 annual maintenance.At a cost of capital of 15 percent, you should:

• A)Buy the new machine and save $600 in equivalent annual costs
• B)Buy the new machine and save $388 in equivalent annual costs
• C)Keep the old machine and save $388 in equivalent annual costs
• D)Keep the old machine and save $580 in equivalent annual costs $12,000 + $5,000

Explain how elasticity considerations influence pricing decisions in various sectors.

Understand the evolutionary basis for human fears and the concept of conditioned fears.

Identify and describe the characteristic features and brain activity associated with obsessive-compulsive disorder.

Understand the symptoms and classification of panic attacks.

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Definitions:

Economic Activity

The activities related to the creation, dissemination, and utilization of products and services within an economy.

Upward-sloping

A term often used in economics to describe a line on a graph that shows an increase in a variable as another variable increases, such as supply or demand curves in relation to price.

Downward-sloping

A downward-sloping curve illustrates a negative relationship between two variables, commonly seen in demand curves where price and quantity demanded are inversely related.

Slope

The rate at which a line on a graph inclines or declines, indicating the relationship between two variables on a plotted curve.