The average productivity of capital is defined as the ratio of total capital employed to the total output produced
a. the extra output produced by employing one more unit of capital while holding other inputs constant.
b. the extra output produced by employing one more unit of capital while allowing other inputs to vary.
c. the ratio of total output produced to the quantity of capital employed.
d.
c
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The decision rule for a profit-maximizing firm operating in a competitive market to hire an additional worker is the value of the:
A) marginal product of the worker should be equal to or greater than the wage rate. B) marginal product of the worker should be equal to or lower than the wage rate. C) average product of the worker being hired should be equal to the wage rate. D) average product of the worker being hired should be lower than the wage rate.
What is an economic variable?
What will be an ideal response?
Which of the following is the correct statement of the marginal rule for optimal input proportions? The input proportion is optimal when
A. PA= PB. B. MPPA= MPPB. C. PA×MPPA= PB×MPPB. D. PA/PB= MPPA/MPPB.
Arthur sells $100 worth of cotton to Bob. Bob turns the cotton into cloth, which he sells to Camille for $300. Camille uses the cloth to make prom dresses that she sells to Donita for $700. Donita sells the dresses for $1200 to kids attending the prom. The total contribution to GDP of this series of transactions is:
a) $1200 b) $500 c) $2300 d) $1100