In January 2010, Timʹs Gyms, Inc

question 206

Multiple Choice

In January 2010, Timʹs Gyms, Inc. owned machines valued at $1 million. During the year, the market value of the equipment fell by 30 percent. During 2010, Tim spent $200,000 on new machines. During 2010, Timʹs net investment totalled

• A) $200,000.
• B) $100,000.
• C) $300,000.
• D) $1 million.

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Definitions:

Factor of Production

An economic resource that is used to produce goods and services, including land, labor, capital, and entrepreneurship.

Average Expenditure Curve

Supply curve representing the price per unit that a firm pays for a good.

Substitution Effect

The change in consumption resulting from a change in price, causing consumers to substitute cheaper goods for more expensive ones.

Wage

Monetary compensation paid by an employer to an employee in exchange for work performed, typically calculated on an hourly, daily, or piecework basis.