The most important implicit cost generally omitted from the accounting statement of a firm is the
a. rental cost of machinery.
b. cost of compliance with government regulations.
c. opportunity cost of the equity capital invested by the owners.
d. accounting cost incurred as the result of tax compliance.
C
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A manager invests $20,000 in equipment that would help the company reduce it's per unit costs from $15 to $12 . He expects the equipment to be in use for the next seven years. After two years, he realizes that if he outsourced the production, the unit cost would be $7 instead. At this point what should the senior manager do?
a. Charge the manager for the next five years of depreciation b. Write off the equipment as sunk cost and allow for outsourcing since it is cheaper c. Not allow for outsourcing since the equipment is good for another five years d. None of the above
Which of the following items is included in the calculation of GDP?
a. Purchase of 100 shares of General Motors stock. b. Purchase of a used car. c. The value of a homemaker's services. d. Sale of Gulf War military surplus. e. None of these would be included.
Which of the following most accurately indicates changes in the size of the union sector in the United States?
a. As a share of the labor force, union membership grew substantially during 1935 through 1955 but has declined substantially since the mid-1950s. b. As a share of the labor force, union membership declined substantially during 1935 through 1955 but has grown substantially since the mid-1950s. c. As a share of the labor force, union membership has steadily grown from less than 10 percent in 1935 to more than 40 percent today. d. Union membership has been approximately 20 percent of the labor force during the last five decades.
Discretionary fiscal policy
A. is the use of the money supply to maintain stable prices. B. is the purchase and sale of Treasury securities to influence economic growth and inflation. C. is the use of regulation to influence economic growth and inflation. D. is the use of government spending and tax policies to influence economic growth and inflation.