Suppose that a machine costs $10,000 in constant dollars and the real rate of interest is 12 percent
If the machine is expected to increase in price by 2 percent and the rate of depreciation is 5 percent, then the user cost of capital for that machine over one year is equal to ________. A) $150
B) $1,500
C) $10,000
D) $102,500
B
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Which of the following makes it difficult to regulate a monopolistically competitive market?
A. There are many firms with different costs of similar products. B. It may stifle innovation if firms can't make economic profit. C. It is difficult to assess the costs. D. All of the above are true.
Exhibit 8-4 Marginal cost and revenue for a firm UnitQuantity Marginal Cost Marginal Revenue 12 $ 5 $9 13 6 9 14 7 9 15 8 9 16 9 9 17 10 9 In Exhibit 8-4, what is this firm's profit-maximizing rate of output?
A. 13. B. 14. C. 15. D. 16.
Which of the following best describes supply-side economics?
A) Labor productivity affects aggregate supply. B) Education affects labor productivity which affects aggregate supply. C) Education affects the incentive to work, save, and invest and, therefore, aggregate supply. D) Tax rates affect the incentive to work, save, and invest and, therefore, aggregate supply.