The Demand for a Resource Depends Primarily on

question 186

Multiple Choice

The demand for a resource depends primarily on

• A) the supply of that resource.
• B) the demand for the product or service that it helps produce.
• C) the price of that input.
• D) the elasticity of supply of substitute inputs.

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Definitions:

Net Present Value

A calculation that compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account.

Required Rate

The minimum return an investor expects to achieve when investing in a particular asset or project.

Payback Period

The duration of time it takes for an investment to generate enough revenue to recover the initial cost of the investment.

Profitability Index

A measure used in capital budgeting to evaluate the profitability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.