Walter rents some ice time at the local hockey rink for 2 hours. After skating for an hour, he finds himself cold, tired, and hungry. If Walter decides to skate around for the other hour before leaving, it is likely because he:
A. is weighing his opportunity costs of the second hour against the benefits of the second hour of skating.
B. is focusing on the sunk cost of the rink time.
C. is ignoring the sunk cost of the rink time.
D. None of these is true.
Answer: B
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Explain what is meant by the "weighted cost of capital" and how it is used in capital budgeting
What will be an ideal response?
One reason the Federal Reserve System was set up was to
a. increase the safety of the U.S. banking system. b. provide the United States with a more flexible supply of currency. c. provide banking services for the federal government. d. do all of these.
The height of the supply curve at a quantity of 100 represents the
a. total value of all 100 units to consumers. b. minimum price required to induce a producer to supply the hundredth unit. c. equilibrium price of the good regardless of the position of the demand curve. d. profit derived by producers from the sale of the hundredth unit.
Which of the following is true?
A. A secure strategy is the optimal strategy for a player no matter what the opponent does. B. In an infinitely repeated game with a low interest rate, collusion is unlikely because the game unravels so that effective punishment cannot be used during any time period. C. For a finitely repeated game, the game is played enough times to effectively punish cheaters, and therefore collusion is likely. D. None of the answers is correct.