Is 1,000 received today worth as much as 1,000 received one year ...

[aabwk4]

Is 1,000 received today worth as much as 1,000 received one year from now? Explain your answer.
 
  What will be an ideal response?

Question 2

Refer to Figure 5-7. The marginal benefit of reducing pollution curve is the same curve as
 
  A) the supply of pollution reduction curve. B) the demand for pollution reduction curve.
  C) the external benefit curve. D) the positive externality curve.

[yuyiding]

Answer to Question 1

No, the timing of the payment is important in deciding its value today. If you receive 1,000 today you you could earn interest on the 1,000 for one year. For example, if the interest rate is 5 then 1,000 received today would be worth 1,000 x 1.05 = 1,050 in one year.

Answer to Question 2

B

[aabwk4]

Wow, this really help

[mohan]

Thanks for the timely response, appreciate it