What do these supply and demand curves indicate about the supply of capital?
a. Supply is increased at prices above the equilibrium.
b. Price does not affect capital supply or demand.
c. The supply curve shifts right when demand rises.
d. Equilibrium rent is below marginal revenue product.
a. Supply is increased at prices above the equilibrium.
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When a price ceiling is set below the equilibrium price, the quantity supplied ________ the quantity demanded and ________ exists
A) is less than; a surplus B) is less than; a shortage C) is greater than; a surplus D) is greater than; a shortage E) equals; an equilibrium
If one defines incremental cost as the change in total cost resulting from a decision, and incremental revenue as the change in total revenue resulting from a decision, any business decision is profitable if:
a. it increases revenue more than costs or reduces costs more than revenue b. it decreases some costs more than it increases others (assuming revenues remain constant) c. it increases some revenues more than it decreases others (assuming costs remain constant) d. all of the above e. b and c only
Returns to scale refers to
A. what happens to output when all inputs are varied in some proportion. B. what happens to output when all inputs are held fixed. C. the law of diminishing returns. D. what happens to output when at least one input is fixed and one is varied.
The law of diminishing marginal productivity applies whenever:
A. output is increased. B. only one input is increased. C. decreasing returns to scale are present. D. all inputs are increased.