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EXMP practice questions

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Question 1Fundamentals and Core Concepts

Which term describes the amount of a product or service that buyers are willing and able to purchase at a given price during a specific period?

  1. Demand Correct answer.
  2. Elasticity
  3. Supply
  4. Equilibrium

Explanation

Demand refers to the quantity of a good or service that consumers are both willing and able to buy at each price during a defined period. Willingness alone is not demand; the buyer must also have the ability to pay.

Question 2Fundamentals and Core Concepts

In a market economy, the primary function of prices is to:

  1. Ensure equal incomes across households
  2. Prevent any firm from making losses
  3. Guarantee that producers earn a profit
  4. Convey information and coordinate allocation of resources Correct answer.

Explanation

Prices act as signals that transmit information about relative scarcity and consumer preferences, and they coordinate decisions of buyers and sellers without central direction. Profits and losses are outcomes of price signals rather than guarantees.

Question 3Fundamentals and Core Concepts

A movement along a demand curve is caused by a change in:

  1. The price of a substitute good
  2. Tastes and preferences
  3. The price of the good itself Correct answer.
  4. Consumer income

Explanation

A change in the good's own price changes the quantity demanded and is shown as a movement along a given demand curve. Shifts of the entire curve occur when a non-price determinant such as income, tastes, or substitute prices changes.

Question 4Fundamentals and Core Concepts

Opportunity cost is best defined as:

  1. The value of the next best alternative forgone when a choice is made Correct answer.
  2. The money paid for a good or service
  3. The cost of producing one additional unit
  4. The total cost of all alternatives available

Explanation

Opportunity cost measures the value of the best alternative given up when resources are committed to one use. It is broader than monetary expenditure because it includes forgone benefits.

Question 5Fundamentals and Core Concepts

Which of the following is a normative statement?

  1. The government should raise the minimum wage Correct answer.
  2. A price ceiling below equilibrium creates a shortage
  3. Inflation reduces the purchasing power of money
  4. The unemployment rate rose last quarter

Explanation

Normative statements express value judgments about what ought to be and cannot be tested purely by evidence. Positive statements describe what is and can in principle be verified or refuted with data.

Question 6Fundamentals and Core Concepts

The production possibilities frontier illustrates the trade-off between two goods. A point inside the frontier indicates that:

  1. Resources are fully and efficiently employed
  2. The economy has achieved allocative efficiency
  3. Production is unattainable with current resources
  4. Some resources are unemployed or inefficiently used Correct answer.

Explanation

Points inside the frontier mean the economy could produce more of at least one good without sacrificing the other, indicating idle or inefficiently used resources. Points on the frontier represent efficient use of all available resources.

Question 7Fundamentals and Core Concepts

A firm that is a price taker in a perfectly competitive market faces a demand curve that is:

  1. Perfectly inelastic
  2. Upward sloping
  3. Perfectly elastic at the market price Correct answer.
  4. Downward sloping

Explanation

Because an individual competitive firm is too small to influence the market price, it can sell any quantity at that price, giving a horizontal, perfectly elastic demand curve. The market demand curve, by contrast, slopes downward.

Question 8Fundamentals and Core Concepts

Which of these is a factor of production in economics?

  1. Labour Correct answer.
  2. Profit
  3. Revenue
  4. Money

Explanation

Economists classify the inputs used to produce goods and services as land, labour, capital, and entrepreneurship. Money, profit, and revenue are financial flows, not productive inputs themselves.

Question 9Fundamentals and Core Concepts

If the price of coffee rises and, as a result, the demand for tea increases, then coffee and tea are:

  1. Substitute goods Correct answer.
  2. Complementary goods
  3. Independent goods
  4. Inferior goods

Explanation

Goods are substitutes when a rise in the price of one increases demand for the other, because consumers switch toward the relatively cheaper alternative. Complementary goods show the opposite relationship.

Question 10Fundamentals and Core Concepts

A price ceiling set below the equilibrium price will most likely produce:

  1. A shortage of the good Correct answer.
  2. A surplus of the good
  3. An immediate rise in quantity supplied
  4. No effect on the market

Explanation

A binding price ceiling holds the price below equilibrium, so quantity demanded exceeds quantity supplied, creating a shortage. Non-binding ceilings set above equilibrium have no effect.

Question 11Fundamentals and Core Concepts

The law of diminishing marginal utility states that as consumption of a good increases within a period:

  1. Consumer preferences become unstable
  2. Total utility always falls
  3. The additional satisfaction from each extra unit tends to decline Correct answer.
  4. Marginal utility becomes negative immediately

Explanation

The law holds that each successive unit consumed yields less additional satisfaction than the previous one, other things equal. Total utility typically keeps rising, but at a decreasing rate, until marginal utility turns negative.

Question 12Fundamentals and Core Concepts

A firm's total fixed cost is 200, and its total variable cost at 10 units of output is 300. What is the average total cost at 10 units?

  1. 500
  2. 50 Correct answer.
  3. 20
  4. 30

Explanation

Total cost equals fixed cost plus variable cost, so 200 + 300 = 500, and average total cost is 500 divided by 10 units, which equals 50. Average total cost combines both cost categories per unit.

Question 13Fundamentals and Core Concepts

If a 10 percent increase in price leads to a 25 percent decrease in quantity demanded, demand over that range is:

  1. Elastic Correct answer.
  2. Inelastic
  3. Unit elastic
  4. Perfectly inelastic

Explanation

Price elasticity of demand equals the percentage change in quantity demanded divided by the percentage change in price, here 25/10 = 2.5. Because the absolute value exceeds one, demand is elastic in that range.

Question 14Fundamentals and Core Concepts

Which situation best illustrates the concept of comparative advantage?

  1. A country can produce every good with fewer inputs than any partner
  2. A country has the largest labour force in the region
  3. A country produces more of a good than any other country
  4. A country produces a good at a lower opportunity cost than its trading partner Correct answer.

Explanation

Comparative advantage rests on lower opportunity cost of producing a good relative to a trading partner, which is the basis for mutually beneficial specialization and trade. Absolute advantage, by contrast, concerns producing more with the same resources.

Question 15Fundamentals and Core Concepts

In a monopoly, compared with a perfectly competitive market with the same costs, the monopolist typically charges:

  1. A lower price and produces more output
  2. The same price and the same output
  3. A higher price and produces more output
  4. A higher price and produces less output Correct answer.

Explanation

A profit-maximizing monopolist restricts output to where marginal revenue equals marginal cost, and because marginal revenue lies below price, the resulting price exceeds the competitive level and quantity falls short of it. This restriction is the source of deadweight loss.

Question 16Fundamentals and Core Concepts

A negative externality such as pollution causes the private market to produce:

  1. Exactly the socially optimal quantity
  2. Zero output
  3. Less than the socially optimal quantity
  4. More than the socially optimal quantity Correct answer.

Explanation

When production imposes costs on third parties that producers do not bear, private marginal cost is below social marginal cost, so output exceeds the socially efficient level. A corrective tax or regulation can align private incentives with social cost.

Question 17Fundamentals and Core Concepts

Gross domestic product measures:

  1. The market value of all final goods and services produced within a country in a period Correct answer.
  2. The total income earned by a country's residents wherever they work
  3. The stock of wealth held by households
  4. The value of all financial assets traded in a year

Explanation

GDP is the market value of final goods and services newly produced within a country's borders during a given period. Intermediate goods are excluded to avoid double counting, and financial transactions are not production.

Question 18Fundamentals and Core Concepts

A government increases spending while tax revenue is unchanged. In the short run, this expansionary fiscal policy is most likely to:

  1. Leave aggregate demand unchanged
  2. Raise the exchange rate and reduce exports only
  3. Increase aggregate demand and raise output Correct answer.
  4. Reduce aggregate demand and lower output

Explanation

Higher government spending directly adds to aggregate demand, and the resulting multiplier effects can raise output and employment in the short run. The size of the effect depends on how much of the extra income is spent rather than saved.

Question 19Fundamentals and Core Concepts

The central bank raises the reserve requirement for commercial banks. The most direct effect is to:

  1. Lower the government budget deficit
  2. Raise the interest rate paid on reserves to zero
  3. Increase the money multiplier and expand credit
  4. Reduce the money multiplier and restrain credit creation Correct answer.

Explanation

A higher reserve requirement forces banks to hold a larger fraction of deposits as reserves, reducing the money multiplier and the volume of new loans the banking system can create. The policy is a contractionary tool of monetary control.

Question 20Fundamentals and Core Concepts

An increase in the price of a key raw material shifts the short-run aggregate supply curve. The most likely result is:

  1. Lower output and higher prices Correct answer.
  2. Higher output and higher prices
  3. Higher output and lower prices
  4. No change in output or prices

Explanation

Higher input costs reduce the quantity firms are willing to supply at each price level, shifting short-run aggregate supply leftward. The new equilibrium typically combines a higher price level with lower output, a pattern often called stagflation.

Question 21Fundamentals and Core Concepts

Which of the following would be counted in a country's labour force?

  1. An unpaid family worker actively seeking paid employment Correct answer.
  2. A person who has given up searching for work
  3. A retired person who does not want a job
  4. A full-time student who is not looking for work

Explanation

The labour force includes people who are employed or unemployed and actively seeking work, so a person seeking paid employment counts even if currently unpaid. Those neither working nor looking are outside the labour force.

Question 22Fundamentals and Core Concepts

A consumer's budget line shifts outward parallel to the original line. This is most consistent with:

  1. An increase in the consumer's income with prices unchanged Correct answer.
  2. A change in the consumer's preferences
  3. A fall in the price of one good only
  4. A rise in the price of both goods by the same percentage

Explanation

A parallel outward shift means the consumer can afford proportionally more of both goods, which happens when income rises while prices stay constant. A change in relative prices would rotate the line instead.

Question 23Fundamentals and Core Concepts

A firm operating in a monopolistically competitive market earns positive economic profit in the short run. In the long run, entry of new firms is expected to:

  1. Cause the firm to become a price taker
  2. Shift the firm's demand curve rightward and raise its price
  3. Shift the firm's demand curve leftward and reduce its profit Correct answer.
  4. Have no effect because products are differentiated

Explanation

Free entry attracts rivals offering close substitutes, which reduces the demand facing each existing firm and makes it more elastic, eroding economic profit toward zero. The firm retains some market power because its product remains differentiated.

Question 24Fundamentals and Core Concepts

A price-discriminating monopolist charges different prices to different consumer groups. This practice increases the firm's profit primarily because it:

  1. Lowers the firm's marginal cost of production
  2. Reduces the number of units the firm must produce
  3. Eliminates the firm's fixed costs
  4. Converts some consumer surplus into additional producer surplus Correct answer.

Explanation

By charging each group closer to its willingness to pay, the firm captures surplus that would otherwise accrue to consumers, raising revenue without a matching rise in cost. Output may also expand toward the efficient level, but the profit gain comes from surplus capture.

Question 25Fundamentals and Core Concepts

In the short run, a perfectly competitive firm should continue producing even if it makes an economic loss, provided that:

  1. Marginal cost is falling
  2. Price exceeds average total cost
  3. Price exceeds average variable cost Correct answer.
  4. Total revenue exceeds total fixed cost

Explanation

If price covers average variable cost, each unit sold contributes something toward fixed costs, so producing limits losses compared with shutting down. If price falls below average variable cost, shutting down minimizes losses in the short run.

Question 26Fundamentals and Core Concepts

Which statement best describes the fundamental economic problem of scarcity?

  1. Some households are poorer than others within a society.
  2. Firms occasionally run out of stock of a popular product.
  3. Resources are limited relative to unlimited human wants. Correct answer.
  4. Governments sometimes spend more than they collect in taxes.

Explanation

Scarcity is the core condition of economics: productive resources are finite while human wants are effectively unlimited, so choices and trade-offs are unavoidable. It applies to every society regardless of income level or wealth. Shortages of a single good and budget deficits are narrower events that do not define the concept.

Question 27Fundamentals and Core Concepts

A student gives up a part-time job paying 500 per month in order to study full time. Which concept does the forgone 500 represent?

  1. Sunk cost of studying
  2. Average fixed cost of studying
  3. Opportunity cost of studying Correct answer.
  4. Marginal cost of studying

Explanation

Opportunity cost is the value of the next best alternative forgone when a choice is made. By studying full time, the student gives up the wage that the best alternative use of that time would have earned. The amount is a measure of what was sacrificed, not an incremental or historical expense.

Question 28Fundamentals and Core Concepts

On a circular flow diagram of a simple economy, households supply which of the following to firms through factor markets?

  1. Imports from abroad
  2. Tax revenue
  3. Land, labour and capital Correct answer.
  4. Finished consumer goods

Explanation

In the circular flow model, households own the factors of production and sell their services to firms in factor markets, receiving wages, rent, interest and profit in return. Firms use those inputs to produce goods and services, which households then buy in product markets. This two-way flow of resources and payments is the essence of the model.

Question 29Fundamentals and Core Concepts

The market for a good is in equilibrium. Simultaneously, consumer incomes rise (the good is normal) and a new tax on producers raises their costs. What is the certain effect on the equilibrium quantity?

  1. Quantity change is indeterminate Correct answer.
  2. Quantity falls unambiguously
  3. Quantity is unchanged
  4. Quantity rises unambiguously

Explanation

Higher incomes shift demand rightward, pushing quantity up, while the tax shifts supply leftward, pushing quantity down. Because the two shifts push quantity in opposite directions, the net change depends on the relative size of the shifts and cannot be determined from the information given. The price effect, by contrast, is unambiguous upward.

Question 30Fundamentals and Core Concepts

A consumer spends a fixed budget on two goods. The price of good X falls while the price of good Y and income are unchanged. On a budget-line diagram this is shown by:

  1. A parallel inward shift of the budget line
  2. A parallel outward shift of the budget line
  3. An inward rotation of the budget line around the Y intercept
  4. An outward rotation of the budget line around the Y intercept Correct answer.

Explanation

The budget line's intercept on the Y axis equals income divided by the price of Y, which is unchanged, so the vertical intercept stays fixed. The X intercept equals income divided by the price of X, which rises when the price of X falls, so the line pivots outward along the X axis. A parallel shift would require a change in income with prices constant.

Question 31Fundamentals and Core Concepts

A firm's production function shows that adding a third worker to a fixed factory raises output by 40 units, while adding a fourth worker raises output by 30 units. This pattern is best explained by:

  1. Increasing returns to scale
  2. Diseconomies of scale
  3. Diminishing marginal returns Correct answer.
  4. Constant returns to scale

Explanation

Diminishing marginal returns occur in the short run when at least one input is fixed and successive units of a variable input add progressively less to total output. The falling increments, 40 then 30 units, are the defining symptom. Returns to scale, by contrast, describe what happens when all inputs change together in the long run.

Question 32Fundamentals and Core Concepts

Which characteristic is essential to a public good such as national defence?

  1. It is always provided free of charge.
  2. It is produced only by government.
  3. It is non-excludable and non-rival in consumption. Correct answer.
  4. It is consumed by a single buyer.

Explanation

A pure public good is defined by two technical properties: one person's consumption does not reduce what is available to others, and it is impossible or very costly to prevent non-payers from enjoying it. These features create the free-rider problem and cause private markets to underprovide the good. Government provision is a common response but is not part of the definition.

Question 33Fundamentals and Core Concepts

A country can produce either 100 units of cloth or 50 units of wine with its resources, while its trading partner can produce either 60 units of cloth or 30 units of wine. Which statement is correct?

  1. The first country has an absolute advantage in both goods.
  2. The first country has a comparative advantage in cloth. Correct answer.
  3. The first country has a comparative advantage in wine.
  4. Neither country can gain from trade.

Explanation

The first country's opportunity cost of one unit of cloth is 0.5 wine, while the partner's is also 0.5 wine, so the ratios are identical and neither has a comparative advantage in either good. Because opportunity costs match exactly, specialization and trade cannot raise total output. Absolute advantage also does not determine the gains from trade.

Question 34Fundamentals and Core Concepts

A firm's total revenue is 5,000 and its explicit costs are 4,200. It could earn 1,000 in its next best alternative use of the owner's resources. What is the firm's economic profit?

  1. 1,000
  2. 4,200
  3. 800
  4. -200 Correct answer.

Explanation

Economic profit subtracts both explicit and implicit costs from total revenue. Accounting profit here is 5,000 minus 4,200, which equals 800; subtracting the 1,000 implicit opportunity cost gives an economic profit of negative 200. The negative result signals that the owner's resources would be better used elsewhere.

Question 35Fundamentals and Core Concepts

Demand for a good is price inelastic. If supply falls, what happens to the total revenue of sellers?

  1. Total revenue rises Correct answer.
  2. Total revenue becomes zero
  3. Total revenue falls
  4. Total revenue is unchanged

Explanation

A leftward shift of supply raises price and reduces quantity sold. When demand is inelastic, the percentage rise in price exceeds the percentage fall in quantity, so total revenue, which is price times quantity, increases. This is why producers of goods with inelastic demand often benefit from supply restrictions.

Question 36Fundamentals and Core Concepts

A firm's marginal cost curve crosses its average total cost curve at the point where average total cost is at its minimum. Why does this relationship hold?

  1. Because marginal cost always rises with output
  2. Because fixed costs are zero at that output
  3. Because marginal revenue equals price in competition
  4. Because average cost falls while marginal cost is below it and rises while marginal cost is above it Correct answer.

Explanation

The marginal value pulls the average toward itself. If the cost of the next unit is below the current average, the average must fall; if it is above, the average must rise. The average therefore stops falling and starts rising exactly where marginal cost equals it, which is the minimum of the average total cost curve.

Question 37Fundamentals and Core Concepts

A monopolist faces a downward-sloping demand curve. At the profit-maximizing output, which condition must hold?

  1. Price equals marginal cost
  2. Marginal revenue is zero
  3. Average total cost equals price
  4. Marginal revenue equals marginal cost and price exceeds marginal revenue Correct answer.

Explanation

Any profit-maximizing firm produces where marginal revenue equals marginal cost. Because a monopolist must lower price to sell more, marginal revenue lies below price, so at the chosen output price exceeds marginal revenue and also exceeds marginal cost. This gap is the source of the deadweight loss associated with monopoly.

Question 38Fundamentals and Core Concepts

A negative externality in production means that the marginal social cost of output exceeds the marginal private cost. Which outcome results if the market is left unregulated?

  1. Output is below the socially optimal level and price is too high
  2. Output exceeds the socially optimal level and price is too low Correct answer.
  3. Output equals the socially optimal level because firms maximize profit
  4. Output is zero because production is banned

Explanation

Firms base decisions on private costs, ignoring the external damage borne by third parties. The market equilibrium therefore lies where marginal private cost equals marginal benefit, at a higher quantity and lower price than the social optimum where marginal social cost equals marginal benefit. The result is overproduction relative to the efficient level.

Question 39Fundamentals and Core Concepts

A price-discriminating monopolist faces two groups with different demand elasticities and can prevent resale. To maximize profit it should:

  1. Refuse to serve the more elastic group
  2. Charge the more elastic group the higher price
  3. Charge the less elastic group the higher price Correct answer.
  4. Charge the same price to both groups

Explanation

A firm with market power maximizes profit by setting a higher price where demand is less responsive, because those buyers are less able to switch away. The more elastic group is charged a lower price to attract additional sales. This is why airlines charge business travellers more than leisure travellers.

Question 40Fundamentals and Core Concepts

A country moves from producing at a point inside its production possibility frontier to a point on the frontier itself. What does this change represent?

  1. An outward shift of the frontier caused by new technology
  2. An improvement in the efficient use of existing resources Correct answer.
  3. An increase in the total quantity of resources available
  4. A reduction in the opportunity cost of both goods

Explanation

Points inside the production possibility frontier are attainable but inefficient, meaning some resources are unemployed or misallocated. Moving to a point on the curve raises output without any change in resources or technology, so it reflects improved efficiency. The frontier itself only shifts when the economy gains more or better resources.

Question 41Planning and Requirements Analysis

Which document formally authorizes a project and gives the project manager authority to apply organizational resources to project activities?

  1. Business case
  2. Benefits management plan
  3. Project charter Correct answer.
  4. Work breakdown structure

Explanation

The project charter is the document issued by the sponsor or initiating authority that formally recognizes the project's existence and grants the project manager authority to commit organizational resources. The business case and benefits management plan are inputs used to justify and shape the project, not the authorization itself.

Question 42Planning and Requirements Analysis

A stakeholder is defined as anyone who:

  1. Has budget authority over the project
  2. Is named in the project charter as a team member
  3. Can affect, be affected by, or perceive themselves to be affected by a decision, activity, or outcome of the project Correct answer.
  4. Has signed the project charter

Explanation

Stakeholder identification is deliberately broad: it includes individuals or groups who can affect, are affected by, or merely perceive themselves to be affected by the project. Perception alone qualifies a person, so the definition is wider than formal roles or signatory status.

Question 43Planning and Requirements Analysis

In a predictive life cycle, which characteristic distinguishes it from an adaptive life cycle?

  1. Scope is defined in detail early and changes are controlled through formal change procedures Correct answer.
  2. Detailed cost estimates are deferred until the final iteration
  3. Deliverables are produced in repeated iterations with scope refined each cycle
  4. The project manager role is shared across the team

Explanation

A predictive (waterfall) life cycle fixes scope early and manages change through formal integrated change control. Adaptive approaches instead refine scope iteratively and welcome change between iterations.

Question 44Planning and Requirements Analysis

What is the primary purpose of creating a work breakdown structure?

  1. To decompose the total scope of work into manageable, deliverable-oriented components Correct answer.
  2. To assign calendar dates to every activity
  3. To document the reporting lines of the project team
  4. To record risks and their responses

Explanation

The WBS is a hierarchical decomposition of the total scope of work to be executed by the project team, organized around deliverables rather than activities. Scheduling, risk, and staffing documents are separate artifacts built on top of it.

Question 45Planning and Requirements Analysis

A project manager is estimating durations for a new type of work with no historical data and high uncertainty. Which estimating approach is most appropriate?

  1. Analogous estimating using a similar past project
  2. Parametric estimating using a published productivity rate
  3. Three-point estimating using optimistic, most likely, and pessimistic values Correct answer.
  4. Bottom-up estimating from a fully detailed activity list

Explanation

Three-point estimating explicitly incorporates uncertainty by combining optimistic, most likely, and pessimistic estimates into an expected duration. Analogous and parametric methods depend on reliable historical or parametric data, which are unavailable here.

Question 46Planning and Requirements Analysis

Which statement best describes the relationship between the project management plan and project documents?

  1. The plan describes how the project will be executed, monitored, and controlled, while documents are working records created and updated during the project Correct answer.
  2. The plan is created only at closing, while documents are created at initiation
  3. They are interchangeable terms for the same collection of records
  4. Project documents must be approved by the sponsor, whereas the plan needs no approval

Explanation

The project management plan integrates the baselines and subsidiary plans that describe how the work will be performed and controlled. Project documents, such as the issue log and assumption log, are working records that are not part of the plan itself.

Question 47Planning and Requirements Analysis

During planning, a team logs the belief that a key vendor will deliver hardware within four weeks, even though no contract clause guarantees it. Where should this be recorded and how should it be treated?

  1. In the risk register as a positive risk
  2. In the stakeholder register as an engagement level
  3. In the assumption log, with validation and a fallback if it proves false Correct answer.
  4. In the issue log as an open defect

Explanation

An assumption is something accepted as true without proof, so it belongs in the assumption log. Because an unvalidated assumption can become a risk, the team should plan to validate it and prepare a contingency if it fails.

Question 48Planning and Requirements Analysis

A sponsor asks for a single high-level summary of project cost, schedule, and scope performance suitable for an executive steering committee. Which planning artifact best serves this need?

  1. The project management plan's performance measurement baseline with a summary-level report design Correct answer.
  2. The detailed cost baseline by work package
  3. A milestone list with planned dates only
  4. The activity resource requirements spreadsheet

Explanation

The performance measurement baseline integrates scope, schedule, and cost against which performance is measured, and the reporting design determines the summary level presented. Executives need an integrated, summarized view rather than raw work-package detail.

Question 49Planning and Requirements Analysis

Which technique is used to reach a group decision where every participant can live with the outcome, even if it is not each person's first choice?

  1. Plurality
  2. Consensus Correct answer.
  3. Unanimity
  4. Dictatorship

Explanation

Consensus means resolving proposals so that everyone can support the decision, not that everyone prefers it. Unanimity requires full agreement, plurality takes the most votes, and dictatorship has one person decide.

Question 50Planning and Requirements Analysis

A project manager wants to compare the cost-effectiveness of buying versus leasing equipment over a multi-year horizon. Which analysis is designed for this comparison?

  1. Earned value analysis
  2. Reserve analysis
  3. Make-or-buy analysis Correct answer.
  4. Cost-benefit analysis using payback period

Explanation

Make-or-buy analysis evaluates whether work or goods should be produced internally or acquired externally, weighing costs and capabilities. It is the standard planning technique for the buy-versus-lease decision.