If a Machine Cost $50,000 Initially and Is Expected to Last

question 4

Multiple Choice

If a machine cost $50,000 initially and is expected to last for 20 years but is worth $60,000 after one year because it is in short supply, an economist most likely would say that:

• A) the machine's cost for each of its 20 years of existence is $2,500.
• B) the machine's cost for each of its 20 years of existence is $3,000.
• C) during the first year the machine had no cost; it provides an implicit revenue of $10,000 to the firm.
• D) the value of the machine will continue to increase 20 percent per year for the next 20 years.

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Definitions:

Erik Erikson

A developmental psychologist known for his theory on the psychosocial development of humans, delineating eight stages from infancy to adulthood.

Extrinsic Rewards

Motivational incentives that come from an outside source, such as money, praise, or awards, as opposed to intrinsic rewards, which come from within oneself.

Livable Wage

A wage level that allows an individual or family to afford adequate shelter, food, and the other necessities of life in a particular society or geographic area.

Nonstandard Schedules

Work or activity schedules that fall outside the traditional 9-to-5, Monday-through-Friday pattern.