The desired level of the capital stock will increase if the
A. user cost of capital increases.
B. effective tax rate increases.
C. price of capital increases.
D. expected future marginal product of capital increases.
Answer: D
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The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $8 per hour, how many hours of students' labor are unemployed?
A) 12,000 hours B) 9,000 hours C) 6,000 hours D) 0 hours
If monetary policy is used to control GDP, there is greater sacrifice of long-run economic growth in pursuing short-run stabilization the ________ is fiscal policy and thus the ________ is the real interest rate
A) tighter, higher B) tighter, lower C) easier, higher D) easier, lower
Inflation will generally redistribute purchasing power when
a. it is fully expected b. it is completely unexpected c. it is greater than 3 percent d. it is greater than 5 percent e. it is greater than 10 percent
Curly and Moe are considering living alone or being roommates and splitting the rent for the next twelve months. If they live alone, they each rent a one bedroom, one bath apartment for $500 per month, while if they are roommates, they can split a two bedroom, one bath apartment for $800 per month. The one difficulty they have is that Moe snores very loudly. Curly estimates the cost of poor sleep due to Moe's snoring at $150 per month. Moe could obtain a snore-eliminating device for $50 per month. Curly and Moe have both taken an economics course and so are willing to apply the Coase theorem and negotiate. Who will compensate the other?
A. Neither Moe nor Curly has the initial property right, and so neither will compensate the other. B. Curly must compensate Moe because Curly is the one who is bothered by the snoring. C. Moe must compensate Curly because Moe is the one who is snoring. D. Either Moe will compensate Curly or Curly will compensate Moe because the alternative, renting separate apartments, leaves each worse off.