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:

Latent Learning

The process by which something is learned but not immediately manifested in an observable change in behavior.

Observational Learning

The process of learning behaviors by watching and imitating others, as proposed by Bandura's social learning theory.

Learned Helplessness

A situation where someone feels unable to control their life, due to a traumatic incident or repeated failures.

Contingency Blocking

A phenomenon in classical conditioning where a previously learned association prevents the acquisition of a new association because the first stimulus is a better predictor of the outcome.