Mika withdraws $100,000 from her trust fund to start up her own manicure business. The trust fund earns 4 percent interest. In order to properly account for all costs of her business, Mika must not forget:
A. the explicit cost of $4,000.
B. the implicit cost of $4,000.
C. the implicit cost of $104,000.
D. the explicit cost of $104,000.
Answer: B
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Jan's Dry Cleaning holds $10,000 on a typical day, although only $2,000 is essential for carrying out business. Making a midday deposit is estimated to reduce cash holdings to $8,000 and cost an extra $80 per year in lost production. If, in addition, an armored car service is engaged to pick up cash more frequently for a fee of $120 per year, cash holdings will be further reduced to $6,000 per day. Employing a computerized cash management service for an annual fee of $180 would reduce cash holdings further to $4,000. If any reduction in cash holdings will be invested in government bonds earning 7%, then how much money should Jan's hold?
A. $4,000 B. $8,000 C. $10,000 D. $6,000
If intended investment is $500 billion, and actual investment is $620 billion, then we know that
a. consumption is $620 billion b. unwanted inventory is $620 billion c. consumption is $120 billion d. unwanted inventory is $120 billion e. saving is $500 billion
Oligopoly is difficult to analyze because
A. price is not a decision variable for oligopolistic firms. B. of the complex interdependence that usually exists among oligopolistic firms. C. there is no price competition among oligopolistic firms. D. there is price competition among oligopolistic firms but no competition on product quality.
The phrase "there's no such thing as a free lunch" is a common way of expressing the concept of efficient markets.
Answer the following statement true (T) or false (F)