When a firm ignores the opportunity cost of capital when making investment or shutdown decisions, this is a case of
a. Fixed-cost fallacy
b. Sunk-cost fallacy
c. Hidden-cost fallacy
d. None of the above
c
You might also like to view...
Okun's Law says that the difference between the unemployment rate and the natural unemployment rate determines
A) potential GDP. B) real GDP. C) the real interest rate. D) the gap between potential GDP and real GDP. E) the gap between the inflation rate and the unemployment rate.
As more of a good is consumed, marginal benefit ________ and as more of a good is produced, marginal cost ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases E) does not change; does not change
At any given moment there is one exchange rate: a. for all the world's currencies
b. for currencies in the free world. c. between every pair of currencies. d. established by the Federal Reserve System.
The GDP is a measure of the market value of all final goods and services produced in the economy in a given time period.
Answer the following statement true (T) or false (F)