Rock Crushers Limited produces smaller rocks from larger rocks. As part of the production process, Rock Crusher Limited takes the below listed actions. Which is a capital investment?
A. Covering the payroll for their rock crushing technicians.
B. Purchasing large rocks and crushing them into smaller rocks.
C. Storing suitably crushed rock for future sales.
D. Making interest payments on their bonds.
Answer: C
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Costs that are incurred when people engage in a trade
A) are a waste of resources because they do not create benefits of equal or greater value. B) can be eliminated by substituting government regulation for voluntary exchange. C) reduce the amount of exchange that occurs. D) rise as the number of middlemen increases.
A price elasticity of demand of 0.67 implies
a. Demand is inelastic b. Demand is elastic c. Demand is unitary elastic d. Demand is perfectly elastic
If an unregulated electric company is a monopolist and faces demand of Q = 50 - 10P. It has a constant marginal cost of 1 and must pay an environmental fee to the government of 0.2 per unit of output. In this situation, the profit-maximizing level of output is:
a. 5 b. 10 c. 20 d. 50
The positive externality associated with education is
a. producers can get higher prices for their goods and services b. less crowding in classrooms c. the increase in society's well-being and economic growth d. the moderation in technological progress associated with basic research e. the inability of non-contributors to benefit from education