Suppose you buy a new car for ?$28,000. One year later it is worth ?$21,000?, and two years later it is worth ?$18,480. The depreciation on the car
A. cannot be determined
B. is 25 percent in the first year
C. is 34 percent for the two years overall
D. rises for the second year.
Answer: B. is 25 percent in the first year
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A free rider in economic theory is someone who does not contribute toward covering the cost of goods which he desires because he
A) has a comparative advantage in defraying the cost of other goods. B) knows his paying or not paying will make no difference in their availability to him. C) regards all such costs as deadweight costs. D) regards all such costs as transaction costs.
Refer to Figure 8.2. At P = $80, how much is profit in the short run?
A) $88 B) $306 C) $351 D) $1000 E) $1024
Which of the following statements best describes the problem of stagflation?
A. Both inflation and economic expansion are occurring simultaneously. B. Prices are falling at the same time aggregate output is increasing. C. It is a period where both prices and unemployment increase simultaneously. D. There are unrestricted increases in aggregate demand along a vertical aggregate supply curve.
Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.