You own a tract of trees and are deciding whether to harvest them now or next year. If you harvest them now, you can invest the proceeds and get a return of 5 on your investment. What should you do?
a. Let the trees grow as long as their dollar worth increases by more than 5
b. Let the trees grow
c. Cut down the trees, and sell them
d. Let the trees grow as long as their dollar worth increases by less than 5
Question 2
For direct price discrimination to work, the firm
a. Must be able to identify members of the low value group
b. Charge the low-value group lower prices than the rest
c. Prevent the low-value group from reselling their low priced goods to higher-valued group
d. All of the above
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