A firm renting out capital does not bear as cost the:
A) lost interest it could have earned by depositing the purchase price of the capital in a bank.
B) wear and tear on the capital.
C) wages of the labor that works with the capital.
D) capital loss or gain in the asset's value.

Question

Quizplus · Accepted Answer

The firm renting out capital bears the costs associated with the capital itself, such as lost interest (opportunity cost), wear and tear, and changes in the asset's value. However, wages of the labor that works with the capital are not a cost borne by the firm for the capital itself; instead, they are an operational expense related to employing workers.

A Firm Renting Out Capital Does Not Bear as Cost