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) The unemployment rate decreases, and the labour-force participation rate de- creases.

) The unemployment rate decreases, and the labour-force participation rate de- creases.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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23. Joe's Build Back Better (BBB) Ammo Corp has $15 million in cash, which it has accumulated from retained earnings. It was planning to use the money to build a new factory. Recently, the interest rate has increased. How does this influence the company's decision, assuming the alternative to investing in a factory is loaning the money out? (A) It doesn't, since the company's shareholders are expecting a new factory. (B) It is more likely to build the factory because a higher interest rate makes the factory more valuable. (C) It is less likely to build the factory, since the opportunity cost of using the funds to build a factory rises with a higher interest rate. (D) It doesn't influence their decision, since the company does not need to borrow money to build the factory.
Transcribed Image Text:23. Joe's Build Back Better (BBB) Ammo Corp has $15 million in cash, which it has accumulated from retained earnings. It was planning to use the money to build a new factory. Recently, the interest rate has increased. How does this influence the company's decision, assuming the alternative to investing in a factory is loaning the money out? (A) It doesn't, since the company's shareholders are expecting a new factory. (B) It is more likely to build the factory because a higher interest rate makes the factory more valuable. (C) It is less likely to build the factory, since the opportunity cost of using the funds to build a factory rises with a higher interest rate. (D) It doesn't influence their decision, since the company does not need to borrow money to build the factory.
24. What would be associated with the type of unemployment created by the minimum- wage law? (A) In hopes of earning a higher income, Lucas goes back to school to become an electrician. (B) Cam quits his job in a grocery store because he would rather work in landscaping. (C) Wayne decides to close his Thai restaurant because he cannot afford to pay workers the going wage. (D) Nicole pays the workers for her auto mechanics business more than the equilibrium wage because she believes it will make them work harder. 25. If an unemployed person quits looking for work, other things equal, which statement best describes the changes in the labour statistics? (A) The unemployment rate and the labour-force participation rate stay the same. (B) The unemployment rate stays the same, and the labour-force participation rate decreases. (C) The unemployment rate decreases, and the labour-force participation rate de- creases. (D) The unemployment rate decreases, and the labour-force participation rate in- creases.
Transcribed Image Text:24. What would be associated with the type of unemployment created by the minimum- wage law? (A) In hopes of earning a higher income, Lucas goes back to school to become an electrician. (B) Cam quits his job in a grocery store because he would rather work in landscaping. (C) Wayne decides to close his Thai restaurant because he cannot afford to pay workers the going wage. (D) Nicole pays the workers for her auto mechanics business more than the equilibrium wage because she believes it will make them work harder. 25. If an unemployed person quits looking for work, other things equal, which statement best describes the changes in the labour statistics? (A) The unemployment rate and the labour-force participation rate stay the same. (B) The unemployment rate stays the same, and the labour-force participation rate decreases. (C) The unemployment rate decreases, and the labour-force participation rate de- creases. (D) The unemployment rate decreases, and the labour-force participation rate in- creases.
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