The Firm in the Table Below Produces Denim Jeans and Each

question 50

Multiple Choice

The firm in the table below produces denim jeans and each unit of capital represents one sewing machine.The MRP for each of machines 10 through 14 is provided.Each sewing machine delivers a stream of MRPs beginning one year from now,for a total of 2 years.Assume that after 2 years each sewing machine is worth nothing.
TABLE 15-2
-Refer to Table 15-2.If the interest rate is 4%,and the purchase price of a sewing machine is $4000,what is the optimal capital stock (number of sewing machines) for this firm?

• A)fewer than 10
• B)10
• C)11
• D)12
• E)more than 12

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Definitions:

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A brand name for hydromorphone, an opioid medication used to relieve pain.

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The constant delivery of fluid or medication into a patient's bloodstream over an extended period.

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A method of relieving pain by administering analgesic medications directly into the spinal column.

Local Infusion Pump

A medical device used to deliver drugs directly into a localized area of the body over a set period of time.