Suppose the government imposes a tax that reduces the quantity sold in the market after the tax to Q2. The price that sellers receive is

To avoid the stock versus flow issue in production, some economists discuss capital usage in terms of rented capital

For example, your firm may not directly own some of the capital inputs to your production operation, and these capital inputs are employed on an hourly or daily basis. Which of the following inputs is a good example of a capital input that acts like a flow? A) Land and buildings that are owned by the firm B) A long-term licensing agreements that allow you to use a patented idea owned by another firm C) A forklift that is rented on an hourly basis D) all of the above

The time spent by students in college

a. leads to lower lifetime earnings because opportunity costs are high. b. is an investment in human capital. c. decreases human capital by lowering work experience. d. increases as the wages paid to low-skilled workers rise.