In a perfectly competitive capital market, when the firm's marginal revenue product of capital exceeds the market interest rate, the
a. firm is maximizing profit
b. firm should increase its quantity demanded of loanable funds
c. firm should decrease its quantity demanded of loanable funds
d. capital market is in equilibrium
e. firm should reduce the rate of interest
B
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When existing firms leave a perfectly competitive market, it causes:
A) an increase in the profitability of existing firms. B) a decrease in the profitability of existing firms. C) a right shift in the demand curve of the good being produced by the firms. D) a left shift in the demand curve of the good being produced by the firms.
When the production possibilities curve is bowed out, resources are:
a. equally well-suited to production of both goods. b. not being used efficiently. c. not equally suited to the production of both types of goods. d. increasing as more of one good is produced. e. of an inferior quality.
On an afternoon that a class meets, you could alternatively study for an exam that will take place in another class the next morning, go to a movie with a friend, or, most desirable to you at present, take a nap. The opportunity cost of attending the afternoon class is
A. missing seeing the movie with your friend. B. forgoing the nap. C. giving up the time to study for the next morning's exam. D. being unable to engage in all three of the above activities.
The collection and use of data to test economic theories is called empirical economics.
Answer the following statement true (T) or false (F)