A Capital Investment Is More Irreversible If It Involves a High

question 114

Multiple Choice

A capital investment is more irreversible if it involves a high:

• A) sunk cost.
• B) labor cost.
• C) maintenance cost.
• D) depreciation rate.

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Definitions:

Factor Market

The marketplace where services of the factors of production (notably land, labor, capital) are bought and sold.

Resources Exchanged

The process through which different types of resources, including goods, services, information, and money, are traded or swapped among individuals, businesses, or countries.

Input Markets

Markets where firms buy resources, goods, and services that they need in order to produce outputs that will be sold in output markets.

Households Supply

Refers to the goods and services supplied by households, including labor, to the market.