Unlike implicit costs, explicit costs:
a. reflect opportunity costs.
b. include the value of the owner's time.
c. are not included in the accounting statement of the firm.
d. are actual cash payments.
e. do not change with the output rate of the firm.
d
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Define gross investment and net investment. Discuss the relationship between gross investment and net investment
What will be an ideal response?
In the figure above, which budget line results in the most real income in terms of carrots?
A) AD B) BD C) CD D) Real income is equal for all three budget lines.
One way to get a government contractor to consider life-cycle costs is to _____
a. use a cost plus incentive fee contract b. use a cost plus fixed fee contract c. use a fixed fee plus contract d. also write a maintenance contract with the contractor
Emotions like guilt and sympathy:
A. reduce the likelihood that a transaction will maximize total economic surplus. B. can solve commitment problems, but generally reduce players' payoffs. C. can solve commitment problems. D. are irrelevant to economic decision-making.