Which of the Following Assumptions Is Made by Economists While

question 1

Multiple Choice

Which of the following assumptions is made by economists while constructing a firm's marginal cost [MC] and average cost [AC] curves?

• A)Input prices are constant.
• B)Output is constant.
• C)Output price is constant.
• D)Technology will vary.

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Definitions:

Net Present Value

The calculation used to find today’s value of a stream of future payments or receipts, by discounting them using a specific rate of return.

Investment

Investment refers to the allocation of resources, such as capital, time, or assets, with the expectation of generating profit or income, involving mechanisms like stocks, bonds, real estate, or other financial vehicles.

Present Value Factors

Multipliers used to calculate the present value of a future sum of money or stream of cash flows given a specific interest rate.

Compound Interest

Interest computed on the original amount of a deposit or loan, incorporating all previously accrued interest from past periods.