The Figure Given Below Shows the Demand [D and D']

question 6

Multiple Choice

The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2

-When does a resource earn only economic rent?

• A)When the supply curve of the resource is relatively elastic
• B)When the supply curve of the resource is horizontal
• C)When the supply curve of the resource is vertical
• D)When the supply curve of the resource is relatively inelastic
• E)When the supply curve of the resource is backward bending

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Definitions:

Present Value Index

A financial metric used to calculate the present value of all cash inflows and outflows associated with an investment, compared to its initial cost.

Net Present Value

A financial metric that calculates the value of a project or investment by discounting all expected future cash flows to the present using a particular rate of return.

Net Present Value

The variance between the net present value of incoming cash and outgoing cash within a set timeframe.

Net Cash Flows

The amount of cash generated or used by a business during a given period, calculated as cash received minus cash spent.