SOLVED

1) If the interest rate is 5 percent, the present value of $2,000 to be received one year from today is about A) $2,005. B) $1,995. C) $1,905. D) $2,100. 2) If the interest rate is 5 percent, the present value of $2,000 to be received two years from today is about A) $2,010. B) $1,814. C) $1,905. D) $1,980. 3) Abigail’s Tax Help, is a firm that sells advice to taxpayers. Abigail is considering buying a new computer that costs $1,500. She expects that the computer will generate an additional profit of $1,200 at the end of the first year and $500 at the end of the second year, after which it will be worthless. If the annual interest rate in the next two years is 5 percent, what is the present value of the profit from the computer? A) $1,596 B) $1,500 C) $1,361 D) $1,654 4) Abigail’s Tax Help, is a firm that sells advice to taxpayers. Abigail is considering buying a new computer that costs $1,600. She expects that the computer will generate additional profit of $1,200 at the end of the first year and $500 at the end of the second year, after which it will be worthless. If the annual interest rate in the next two years is 8 percent, what is the present value of the profit from the the computer? A) $1,600 B) $1,286 C) $1,540 D) $1,750 5) In the figure above, the demand and supply of high-skilled workers has an H subscript and the demand and supply of low-skilled workers as an L subscript. In the market for low-skilled labor, the equilibrium wage rate is A) $4. B) $6. C) $10. D) $14. 6) In the figure above, the demand and supply of high-skilled workers has an H subscript and the demand and supply of low-skilled workers as an L subscript. The quantity of low-skilled labor employed is A) 6,000 hours per day. B) 2,000 hours per day. C) 4,000 hours per day. D) 5,000 hours per day. 7) In the figure above, the demand and supply of high-skilled workers has an H subscript and the demand and supply of low-skilled workers as an L subscript. The quantity of high-skilled labor employed is A) 2,000 hours per day. B) 4,000 hours per day. C) 5,000 hours per day. D) 6,000 hours per day. 8) In the figure above, the demand and supply of high-skilled workers has an H subscript and the demand and supply of low-skilled workers as an L subscript. In the market for high-skilled labor, the equilibrium wage rate is A) $6. B) $4. C) $14. D) $10. 9) In the figure above, the demand and supply of high-skilled workers has an H subscript and the demand and supply of low-skilled workers as an L subscript. The difference in wage rate between low-skilled and high-skilled labor is A) $8. B) $10. C) $4. D) $14. 10) Contests can help explain why A) the super rich earn vastly more than other people who have similar amounts of human capital. B) human capital among the poor has been increasing. C) the world distribution of income is becoming more equal. D) the average woman earns less than the average man.