Automobile companies typically make some of the parts for cars (for example, the body and engine) but not others (for example, the tires). Under what conditions would you expect an automobile manufacturer to be most likely to buy inputs from other companies?
a. when the specifications (size, style, etc.) of the inputs change frequently
b. when the inputs being produced have little value
c. when market prices have not been established for the inputs
d. when it is relatively easy to measure the quantity and quality of the input
D
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Refer to the scenario above. The principal in this case is:
A) $300. B) $1,000. C) $1,300. D) $2,300.
The primary functions of money are:
a. velocity, liquidity, and transactions. b. speculative demand, measure of value, and precautionary demand. c. a medium of exchange, a unit of account, and a store of value. d. a store of value, heterogeneity, and a medium of exchange. e. currency value, fiat value, and accepted value.
Diminishing marginal returns to labor means
A) that each additional worker costs more. B) that each additional worker produces less than the previous worker. C) that each additional worker costs less. D) that total product grows at a constant rate when workers are added to production.
The cost of capital is a combination of a firm's payments to the different sources of capital funding is called
A) the weighted average cost of capital. B) the average cost of capital. C) the discount rate. D) the transfer price.