Assume the following: (1 ) the real cost of a unit of capital is one; (2 ) the unit of capital is expected to increase a firm's real profit by $10,000 each year, and depreciate by 8% each year (? = .08); and (3 ) The real interest rate is 2% (r = .02). What is the "user cost" or "rental cost" of this unit of capital?
A) .02
B) .06
C) .10
D) .08/.02 = 4
E) none of the above
C
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How would you explain the decline in typewriter prices? A) Typewriter producers have become less greedy. B) The demand curve for typewriters has shifted to the left. C) The supply curve for typewriters has shifted to the right. D) The supply curve for typewriters has shifted to the left.
The person most closely associated with a conservative theory of poverty is
A. Charles Murray. B. William Julius Wilson. C. Frances Fox Piven. D. Barbara Ehrenreich.
A change in the price of a good
A. Results in a change in supply. B. Results in a change in quantity supplied. C. Causes a shift in the supply curve. D. Is a determinant of supply.
Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B