Author Question: Len is putting in a new swimming pool. He can either heat his pool with natural gas or with solar ... (Read 60 times)

student77 · **on:** Jul 1, 2018

Len is putting in a new swimming pool. He can either heat his pool with natural gas or with solar power.

If he chooses solar power it will cost him more today, but he will recover these costs over the next 7 years in savings on his natural gas bill. The solar heater is expected to last 12 years. Len: A) will put in the solar heater regardless of the discount rate because the savings in natural gas outweigh the initial cost of the solar heater.
B) is more likely to install the solar heater as the discount rate increases.
C) is more likely to install the solar heater as the discount rate declines.
D) will not put in the solar heater unless he is an environmentalist.

Question 2

Which factors determine the firm's elasticity of demand?

A) Elasticity of market demand and number of firms
B) Number of firms and the nature of interaction among firms
C) Elasticity of market demand, number of firms, and the nature of interaction among firms
D) none of the above