If a Firm Buys a Building So as to Have

question 76

Multiple Choice

If a firm buys a building so as to have office space for its workers,the monthly opportunity cost of the building is best measured as

• A) the monthly mortgage payment the firm must pay.
• B) the price the firm paid divided by twelve.
• C) zero.
• D) the rent the firm could earn if it rented the building to another firm.

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Definitions:

Value-Added Tax

A consumption tax placed on a product whenever value is added at a stage of production and at the point of retail sale.

United States

A country in North America consisting of 50 states, a federal district, five major self-governing territories, and various possessions.

Sales Taxes

Taxes imposed by governments on sales of goods and services, typically calculated as a percentage of the sale price.

Digressive

Relating to or denoting a method that reduces in pace or intensity over time or steps, often used in taxation to describe tax rates that increase less proportionally with the amount subject to tax.