The interest on a business loan is an implicit cost.
Answer the following statement true (T) or false (F)
False
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A homeowner, frustrated with his next-door-neighbor's refusal to mow his lawn, decides he wants to purchase the house from his neighbor and rent it to a more conscientious person, but his neighbor refuses to sell. In this case,
A) eminent domain would likely be used to reduce transactions costs. B) eminent domain would likely be used to reduce the holdout problem. C) eminent domain would not likely be used. D) eminent domain would likely be used because this transaction would increase cooperative surplus.
How is the Solow residual measured? What problems arise in its measurement when resource utilization varies over the business cycle? What implications do these measurement issues have for evidence supporting the RBC model?
What will be an ideal response?
A statement describing how the world is
a. is a normative statement. b. is a positive statement. c. would only be made by an economist speaking as a policy adviser. d. would only be made by an economist employed by the government.
When there is a high degree of complementarity between two products, then the indifference curves will:
A. be reasonably close to straight lines. B. be perfectly straight lines. C. bend sharply. D. be positively sloped.