What are the two components of the user cost of capital? Use an example capital good to explain.

Q: 10. From the following data calculate Net Value Added at Factor Cost

A: GDP is an important macroeconomic measure of growth that is used to determine the total aggregate…

Q: 2(a) In what sense is capital productive?   (b) Is interest earned?

A: 2(a) In what sense is capital productive? The amount of output divided by the volume of inputs is…

Q: What is Paid-in capital?

A: In exchange for stock, the shareholder gives a full amount of cash or asset to the company is known…

Q: What models does Gary Becker use to justify and explain human capital and why economics should focus…

A: The late Professor Gary Stanley Becker (1930-2014), was one of the early and key theorists of "the…

Q: A borrower cannot become a saver if the rate of interest decreases, but might become a saver if the…

A: To understand the above stated problem firstly we state the intertemporal budget constraint faced by…

Q: Explain the term capital in depth

A: Companies employ capital to fund the continuous production of goods and services in order to…

Q: What is the advantage of capital gains treatment of income compared to expensing?  Explain using…

A: Capital gains treatment of income With the exception of profits realised from T-bills, which are not…

Q: What is Adam Smith’s view on “accumulation of wealth”?   What does he say “must be done with the…

A: According to adam smith, the needs of an individual lead to a self-interest behavior that creates…

Q: nysical capital includes the knowledge and skills workers have gained thre ducation and experience.…

A: 1.. TRUE, BECAUSE  A strong economic environment generally includes some kind of market direction at…

Q: What do you mean by capital loss. Write a brief answer

A: A capital loss is said to occur when the actual value of a capital asset, such as an investment or…

Q: How to economists conceptualise Human Capital? Why are these differences important both empirically…

A: Capital: It refers to the money that has been used for the development of the economy. The more…

Q: Describe the concept of rate of return?

A: Rate of return is a rate at which investment has earned profit or suffered a loss in terms of…

Q: Question text Which of the following is a determinant of productivity? a. Physical capital b. Tax…

A: (8)Question text: Which of the following is a determinant of productivity? a. Physical capital b.…

Q: During the 1980s, 1990s, and the first decade of the 20th century, the United States experienced a…

A: The markets of various factors are interrelated. Change in one affects the other.…

Q: What is meant by the term cost of living? Define and explain it.

A: Cost of living is a way to calculate the minimum amount of money required to cover basic need of an…

Q: What is estimation of economic Opportunity cost of capital

A: There are different methods to to estimate the economic opportunity cost of capital. Such as:-…

Q: Explain cost of capital .

A: Cost of capital = Is the addition of the cost of equity + cost  of the debt as per given

Q: what is relationship between saving , capital formation and consuption ?

A: Capital formation is given by the amount of investment. In a closed economy without Government…

Q: Explain the n Capital Theory?

A: Traditional capital theory is that the study of the forces determining the speed of interest, the…

Q: Explain the concept of rate of return?

A: The rate of return, expressed in terms of percentage, can be defined as the net gain or loss on the…

Q: Define the term short-term investments?

A: The investment is a practice of investing money with the expectation of some future benefit or…

Q: How does the price of capital tend to change during an economic boom? During a recession?

A: Contraction Period: The term contraction period refers to the period of economic slowdown or the…

Q: It has been said that a society with high savings rate is a society with a high standard of living.…

A: (Q) It has been said that a society with a high savings rate is a society with a high standard of…

Q: Suppose that capital markets are imperfect and some workers face borrowing constraints (cannot…

A: When the capital markets are imperfect and some workers face borrowing constraints (cannot obtain…

Q: Using the graph of the loanable funds market below, if the supply of loanable funds increases from…

A: Consider the graph movement below

Q: The following graph shows the supply of and demand for capital in a market over the last year. You…

A: Answer -  The market interest rate increased by 2.0%, and the amount of capital  borrowed "…

Q: Define the term the concept of return on investment?

A: Return on investment measures the performance which is used to evaluate the efficiency of an…

Q: What is the opportunity cost to the society of investing in capital?

A: Opportunity cost is nothing but foregoing opportunity of a project when other project is chosen.

Q: Explain why there is a negative relationship between interest rate and quantity demand of capital…

A: There is negative relationship between interest rate and quantity of capital demanded. When the…

Q: Three student have each saved $1,000. Each has an investment opportunity in which he or she can…

A: Student money at the end of the year Harry : 1000 (1 + 0.05) = 1,050Ron: 1000 (1 + 0.08) =…

Q: Explain why a university degree can be treated as a form of capital.

A: Human Capital is a measure of education, skills, attributes and capacity of labour which affect the…

Q: Discuss wether all firms in a country will welcome a change in people’s income. MUST use examples,…

A: The markets are the place where the buyers and sellers of the goods and services tend to interact…

Q: How does the price of capital tend to change during a boom? During a recession?

A: A boom corresponds to a time of heightened economic activity within any a corporation, a sector, an…

Q: What is the opportunity cost of investing in a physical capital?

A: According the Neo-classical theory of economics with respect to factors of production there are…

Q: . What is the amount of economic investment that has resulted from BBQ's actions? $ million . How…

A: Here the restaurant chain build 20 new restaurants.

Q: How do firms and individuals determine if it's worth it to (a) invest in capital improvements, (b)…

A: There is a basic principle of marginal benefit(MB) and marginal cost(MC). We will answer this…

Q: What is the difference between the rates of return for a renewable and nonrenewable resource? How do…

A:

Q: An example of a flow variable is a. capital. b. consumption expenditure by households. c. the…

A: A flow variable has always been a quantifiable variable that is assessed throughout time. It has a…

Q: Define and explain in your own words “Physical Capital", “Real Interest Rate", "Potential…

A: There are four factors of production: land, labor, physical capital, and entrepreneurship. These are…