Suppose the Current Price of Gold Is $600 Per Ounce

question 8

Multiple Choice

Suppose the current price of gold is $600 per ounce and the price of gold is expected to increase at a rate of 5% per year for the foreseeable future.What is the current value of 0.2 million ounces of gold to be produced each year for the next five years (the discount rate is 8% per year) ?

• A)$600.00 million
• B)$521.64 million
• C)$690.86 million
• D)$3,000.00 million

Identify factors that lead to shifts or movements along cost curves in short-run and long-run scenarios.

Differentiate between variable, fixed, and sunk costs and their relevance to business decisions.

Apply the concept of the law of diminishing returns to various contexts including study time and production.

Understand how external factors like gasoline prices impact production costs and firm responses.

---

Definitions:

Systematic

Methodically organized and carried out according to a plan or structured framework.

Chemicals

Substances with a distinct molecular composition that are used or produced in a chemical process.

Inhelder

Swiss developmental psychologist best known for her work on the cognitive development of children, often in collaboration with Jean Piaget.