Authors libby rittenberg 728

4 An increase in interest rates If developed and made practical, fusion technology would allow the production of virtually unlimited quantities of cheap, pollution-free energy Some scientists predict that the technology for fusion will be developed within the next few decades How does an expectation that fusion will be developed affect the market for oil today? Is the rent paid for an apartment economic rent? Explain Film director Brett Ratner (Rush Hour, After the Sunset, and others) commented to a New York Times (November 13, 2004, p A19) reporter that, “If he weren’t a director, Mr Ratner said he would surely be taking orders at McDonald’s.” How much economic rent is Mr Ratner likely earning? 10 Suppose you own a ranch, and that commercial and residential development start to take place around your ranch How will this affect the value of your property? What will happen to the quantity of land? What kind of return will you earn? 11 Explain why higher interest rates tend to increase the current use of natural resources NUMERICAL PROBLEMS Use the tables below to answer Problems 1–5 The first table gives the present value of $1 at the end of different time periods, given different interest rates For example, at an interest rate of 10%, the present value of $1 to be paid in 20 years is $0.149 At 10% interest, the present value of $1,000 to be paid in 20 years equals $1,000 times 0.149, or $149 The second table gives the present value of a stream of payments of $1 to be made at the end of each period for a given number of periods For example, at 10% interest, the present value of Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 728