The costs associated with the user cost of capital include all of the following except
A) the real price of the capital good.
B) the expected change in the marginal cost of capital based on expectations of the future.
C) the real interest cost of borrowing to finance the purchase of the capital good.
D) the depreciation costs associated with actually using the capital good.
B
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When the economy is in a recession, ________ taxes decrease while ________ spending increases and, as a result of this automatic fiscal policy, aggregate demand ________
A) induced; discretionary; is not changed B) needs-tested; induced; decreases C) induced; needs-tested; increases D) discretionary; induced; is not changed E) discretionary; needs-tested; increases
Firms in perfect competition sell differentiated products
Indicate whether the statement is true or false
A production process is a specific combination of resources used to produce a good or service.
Answer the following statement true (T) or false (F)
Table 1.3 shows the hypothetical trade-off between different combinations of brushes and combs that might be produced in a year with the limited capacity for Country X, ceteris paribus.Table 1.3Production Possibilities for Brushes and CombsCombinationNumber of BrushesOpportunity Cost of Brushes in Terms of CombsNumber of CombsOpportunity Cost of Combs in Terms of BrushesJ0 4 K10 3 L17 2 M21 1 N23 0 Table 1.3Production Possibilities for Brushes and CombsCombinationNumber of combsOpportunity Cost(Foregone brushes)Number of brushesOpportunity Cost (Foregone combs)J4 0NAK3 10 L2 17 M1 21 N0NA23 On the basis of Table 1.3, what is the opportunity cost of producing at point M rather than point N?
A. 1 brush. B. 23 combs. C. 21 combs. D. 2 brushes.