The opportunity cost of capital is
A) the rate of return realized on an investment.
B) the rate of return that could be earned by the owner's capital were it used elsewhere.
C) the rate used to calculate a firm's tax liability.
D) the rate of interest the government uses to calculate legal business tax penalties.
B
You might also like to view...
Answer the next question using the following budget information for a hypothetical economy. All data are in billions of dollars. Also assume that all budget surpluses are used to pay down the public debt. Government SpendingTax RevenuesGDPYear 1$800$825$4,000Year 28508504,200Year 39008754,350Year 49509004,500Year 51,0009254,600Assume that year 1 is the first year for this economy and year 3 is the current year. What is the public debt in this economy at year 3?
A. $75 billion B. $50 billion C. $25 billion D. $0 billion
Entry and exit continue in monopolistic competition until the remaining firms are
A) earning an economic profit. B) incurring an economic loss. C) earning less than a normal profit. D) earning zero economic profit. E) producing the normal amount of product differentiation.
What occurs when it is impossible to improve the situation of one party without imposing a cost on another?
a. efficiency b. consumer surplus c. social surplus d. deadweight loss
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for rice. What happens in this market if buyers expect the price of rice to fall?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)