ECON 315 Midterm 1 Questions And Answers With Verified Solutions 2023
ECON 315 Midterm 1 Questions And Answers With Verified Solutions 2023 Present value calculation: key formula PV = FV/(1+i)^n Value of a perpetuity: key formula pvperpetuity = CF/i Value of a firm; key formula pvfirm = π0(1 + i)/(i - g) Influences on present value a. Higher Interest Rate = Lower Present Value B. Longer Amount of Time = Lower Present Value C. Higher Profits = Higher Present Value Influences on demand a. Income I. Normal good (an increase in income = increase in demand) Ii. Inferior good (Decrease in income = increase in demand) B. Changes in Price of Other Goods I. Substitutes 1. Increase in the price of a substitutes cause an increase of demand for the other good Ii. Compliments 1. Decrease in price of compliments then causes an increase in demand for the other good C. Preference I. If there is a positive change in consumer preference: there is an increase in demand D. Changes in number of consumer I. Increases in number of consumers increases in demand E. Changes in
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Liberty University
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ECON 315
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- econ 315 midterm 1
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econ 315 midterm 1 questions and answers with verified solutions 2023
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present value calculation key formula
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