Davy's Doggie Daycare rents a warehouse and field for $2,000 a month to house its boarding pooches. Farmer Fred owns the property, he used to use it for farming and made $3,000 a month, but has since retired. What is the cost of the warehouse and field to Davy?
A. It is an implicit cost of $3,000.
B. It is an explicit cost of $2,000.
C. There is both an explicit and implicit cost totaling $5,000.
D. It is an implicit cost of $0.
Answer: B
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Answer the following statement true (T) or false (F)
The speculative attack on the German mark in 1971 resulted in
A) a large increase in the German monetary base. B) a decline in the value of the mark relative to the dollar. C) a decision to end the floating of the mark against the dollar. D) a large decrease in the German monetary base.
In the real intertemporal model with investment
A) the firm maximizes the present value of profits. B) the firm maximizes current profits. C) the firm maximizes the present value of revenues. D) the firm maximizes current profits plus future profits.
In the market for oil in the short run, demand
a. and supply are both elastic. b. and supply are both inelastic. c. is elastic and supply is inelastic. d. is inelastic and supply is elastic.