The marginal revenue product of a resource:
a. is defined as the marginal product of the resource multiplied by the resource price.
b. simply means that a firm should add to its capital stock as long as competition requires it.
c. equals the extra output produced by an additional unit of the resource multiplied by the price of that output.
d. equals the average product of the resource multiplied by the cost of hiring an additional (marginal) unit of the resource.
c
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The scarcity of physical resources is far more fundamental to the study of economics than the scarcity of funds.
Answer the following statement true (T) or false (F)
The free rider problem arises when a good is:
a. rivalrous. b. excludable. c. nonexcludable. d. nonrivalrous. e. an absolute necessity.
To reconcile the difference between GNP and national income, the U.S. Department of Commerce (which calculates these things)
a. adds depreciation of capital and nonfactor charges to national income b. adds depreciation of capital to and subtracts indirect business taxes from national income c. subtracts depreciation of capital and indirect business taxes from national income d. subtracts depreciation of capital from and adds indirect business taxes to national income e. subtracts depreciation of capital and indirect business taxes from GDP
In 2010, which of the following was true regarding the extremely large deficits that the U.S. recently encountered?
a. Most politicians and economists argued that the deficit had to be reduced. b. Most politicians argued that the deficit had to be reduced but economists cautioned against this course of action. c. Most economists argued that the deficit had to be reduced but politicians cautioned against this course of action. d. Both politicians and economist cautioned against deficit reduction.