Author Question: What do economists mean when they say that a firm's plant is fixed? What will be an ideal ... (Read 29 times)

MirandaLo · **on:** Jun 29, 2018

What do economists mean when they say that a firm's plant is fixed?

What will be an ideal response?

Question 2

St. Mary's Church has a balloon payment of 100,000 due on its mortgage in two years. If the interest rate is 8 percent, the present value of St. Mary's balloon mortgage payment is

A) 100,000.00.
B) 116,640.00.
C) 85, 733.88.
D) None of the above answers is correct.

Danny Ewald · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

The phrase that a firm's plant is fixed refers to the fact that, in the short run, there are some factors that are fixed, that is, the quantity employed cannot be changed. These factors of production, which include factors such as the firm's capital and land, are collectively referred to as the firm's plant.

Answer to Question 2

C