The opportunity cost of current consumption differs for borrowers and savers only if the interest rate for savers differs from the interest rate for borrowers.
Answer the following statement true (T) or false (F)
True
Rationale: If borrowers and savers faced the same interest rates, they would be giving up the same in future consumption for every dollar consumed now.
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If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14 units of output is $30.23, what will happen to the average cost of production if the 15th unit is produced?
A) Average cost will fall. B) Average cost could increase or decrease depending on what happens to fixed cost. C) Average cost increases as more is produced. D) Average cost could increase or decrease depending on what happens to variable cost.
A firm's most recent annual dividend was $2 per share; its shares sell for $40 in the stock market, and the company expects its dividend to grow at a constant rate of 5% in the foreseeable future
Using the dividend growth (Gordon) model, what would you estimate its equity cost of capital to be?
The marginal revenue product is: a. the value of all the final goods and services produced by a firm
b. the value that an worker contributes to a firm. c. an increase in the profit of a firm with an increase in the output by one unit. d. the output per unit of worker employed by a firm. e. the value that all the unskilled workers contribute to a firm.
Compared to a situation where transaction costs are zero, the existence of transaction costs
a. will reduce the volume of trade. b. will reduce the gains from trade. c. may lead some buyers and sellers to employ middlemen. d. All of the above are correct.