Question :
51) Consider a firm that places coin-operated coffee machines in : 1384300
51) Consider a firm that places coin-operated coffee machines in university buildings. On January 1, 2007 the firm has 1500 machines in operation, and on January 1, 2008 the firm has 2250 machines in operation. A possible explanation is that
1) there was an increase in productivity of coin-operated coffee machines that reduced the cost per cup of coffee produced;
2) an increase in demand for coffee led to an increase in the price per cup;
3) there was an increase in interest rates.
A) 1 only
B) 2 only
C) 3 only
D) 1 or 2
E) 2 or 3
52) Refer to Figure 15-1. The downward slope of the firm’s investment demand curve can be explained by
A) the negative relationship between the interest rate and the present value of a future stream of MRPs generated by each coffee machine.
B) the negative relationship between the interest rate and the purchase price of the coffee machines.
C) the downward slope of the demand curve for the firm’s product—cups of coffee.
D) the relationship between the MRP of the coffee machine and technology improvements to the coffee machines.
E) the downward slope of the marginal cost of capital curve.
53) Refer to Figure 15-1. One possible explanation for a shift of the firm’s investment demand curve from I0 to I2 is
A) an increase in the interest rate.
B) a technological improvement that reduces the cost per cup of coffee.
C) a decrease in the interest rate.
D) an increase in the expected MRP of the coffee machines.
E) demographic changes that lead to a reduction in the growth rate of the student population at universities.
54) Refer to Figure 15-1. One possible explanation for a shift of the firm’s investment demand curve from to is
A) an increase in the interest rate.
B) a technological change that increases the cost per cup of coffee.
C) a decrease in the interest rate.
D) an increase in the expected MRP of the coffee machines.
E) demographic changes that lead to a reduction in the growth rate of the student population at universities.
55) Refer to Table 15-2. If the annual interest rate is 4%, what is the present value of the 11th sewing machine (rounded to the nearest dollar)? Note that the stream of MRPs begins one year from now and lasts 2 years.
A) $3600
B) $3531
C) $3328
D) $3395
E) $3772
56) Refer to Table 15-2. If the interest rate is 4%, what is the present value of the 14th sewing machine (rounded to the nearest dollar)? Note that the stream of MRPs begins one year from now and lasts for 2 years.
A) $1400
B) $2800
C) $4200
D) $2641
E) $2263
57) Refer to Table 15-2. If the interest rate is 4%, and the purchase price of a sewing machine is $3000, 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
58) 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
59) Refer to Table 15-2. If the interest rate is 4% and the purchase price of a sewing machine is $2000, what is the optimal capital stock (number of sewing machines) for this firm?
A) 11
B) 12
C) 13
D) exactly 14
E) at least 14
60) Refer to Table 15-2. Suppose the interest rate is 4%, the purchase price of a sewing machine is $3000, and the firm is holding its optimal capital stock. If the interest rate rises to 7%, how will this firm adjust its capital stock?
A) it will reduce its number of machines from 12 to 11
B) it will reduce its number of machines from 14 to 13
C) it will not change its capital stock
D) it will increase its number of machines from 11 to 12
E) it will increase its number of machines from 13 to 14
