Fixed costs include all but
A) a normal rate of return on investment.
B) temporary labor.
C) property tax on the existing buildings.
D) machines that have been producing output.
Answer: B
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Refer to Figure 18.3. The opportunity cost of producing pogo sticks in Livonia is
A) 2/3 of a scooter. B) 4/5 of a scooter. C) 6/5 scooters. D) 1.25 scooters.
A firm engaging in rent seeking activity
A) is breaking the law. B) is willing to spend up to the gain in producer surplus. C) is irrational. D) increases societal gain.
Sensitivity analysis of the results may include the following with the exception of
A) stability over time analysis of the estimated multipliers. B) using homoskedasticity only rather than HAC standard errors. C) investigation of omitted variable bias. D) looking at different computations of the HAC standard errors.
Proved reserves of natural gas and oil
a. will last only another five years at the current worldwide consumption rate. b. reveal little about whether the world is about to run out of these resources since they are calculated at present levels of price and technology. c. are just another way of measuring how many years civilization will continue. d. indicate that the supply of petroleum will be depleted by the year 2020 unless governments adopt price controls and energy rationing.