Author Question: Which of the following factors influence the appropriate value for the social rate of discount used ... (Read 36 times)

SAVANNAHHOOPER23 · **on:** Jul 1, 2018

Which of the following factors influence the appropriate value for the social rate of discount used in NPV analysis of stock externalities?

A) Expected rate of economic growth
B) Extent of social risk aversion
C) The society's rate of time preference
D) all of the above

Question 2

Why is the production possibilities frontier concave to (bowed away from) the origin?

A) Consumers have declining marginal utility, so their relative satisfaction from consuming a good changes as they move from high levels to low levels of consumption.
B) The shape of the curve is due to the marginal costs of producing the two goods. At high levels of output for a particular good, the marginal cost is very high, and the firm can use the same inputs to produce a relatively large quantity of the other good.
C) For a production possibilities frontier, we no longer assume firms are price takers, and the input prices and output prices change as the firms alter their mix of outputs.
D) none of the above