Which of the following is an example of something that economists would consider a cost but accountants would not?
A. the cost of materials and supplies purchased by a firm
B. the salary that the firm actually pays to the firm's owner
C. the interest income foregone by the firm's owner because the owner invested funds into the firm
D. the cost of advertising
Answer: C
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The asset beta in the Capital Asset Pricing Model is a moderate number that measures
A) how sensitive the asset's return is to market movements. B) how sensitive the asset's discount rate is to changes in inflation. C) the risk premium on the stock market. D) the risk premium on an individual stock.
If the Fed sells a U.S. government bond to a bank, what is the effect on the money supply? a. It will increase
b. It will not change. c. It will decrease. d. It will be uncertain.
In drawing a straight-line production possibilities curve for an economy that produces oil and corn, we assume that resources (for example, the number of labor hours)
a. are fixed b. increase at a constant rate c. increase at an increasing rate d. increase at a decreasing rate e. are not uniform, such as a variety of skills and quality of work
A steel company sells some steel to a bicycle company for $150 . The bicycle company uses the steel to produce a bicycle, which it sells for $250 . Taken together, these two transactions contribute
a. $150 to GDP. b. $250 to GDP. c. between $250 and $400 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle. d. $400 to GDP.