Which of the following is an implicit cost?
a. salaries paid to owners who work for their own firm
b. interest on money borrowed to finance equipment purchases
c. cash payments for raw materials
d. wages paid to hourly employees
e. foregone rent on office space owned and used by the firm
E
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Suppose the majority of the shares of Ford stock were sold to a Japanese firm. Assuming all else remains constant, this will
A) increase the balance of the U.S. current account. B) increase foreign direct investment in the United States. C) decrease net portfolio investment in the United States. D) increase the balance of the U.S. financial account. E) create a capital outflow in the United States.
Which of the following is a main factor that explains the differences in the incomes of U.S. households?
A. inheritances B. luck and misfortune C. discrimination D. All of these
An increase in which of the following variables will cause a reduction in the amount of money individuals wish to hold in the current period?
A) current income B) the current nominal interest rate C) the current real interest rate D) expected future income E) all of the above
The cost involved when choosing between alternatives is known as the
A. sunk cost. B. normative cost. C. marginal cost. D. opportunity cost.