If you make a $200 deposit today with 3% interest compounding annually, how much money will you have in 10 years?
200 = Present Value 3 = I/Y N = 10 Compute Future Value = 268.79
What do profits equal in the long run under perfect competition?
Under perfect competition, profits equal zero in the long run. This is due to new entrants in the market seeking a profit, thus driving down the price until marginal cost equals marginal revenue.
Why are some countries rich while others are poor?
Institutions are the main reason some countries are rich while others are poor. This is made up of stable property rights, honest and reliable government, protection, and more. If rights are not protected, wealth cannot be created. Individuals have no incentive to create, work, and make money because they know that what they have can just be taken from them. Theft does not create value within an economy but rather redistributes it. The same can be said if an individual is afraid what they have can be taken away by the government.