The marginal product of capital:
a. is equal to the increase in capital necessary to generate a one-unit increase in output
b. is equal to the increase in output obtained from a one-unit increase in capital, holding other factors constant.
c. is equal to the incremental profit associated with selling one more unit of output.
d. is equal to the incremental cost of employing one more unit of physical or human capital.
b
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Answer the following statement(s) true (T) or false (F)
1. An outcome that is Pareto optimal is preferred by both players to all other possible outcomes. 2. A Nash equilibrium need not be Pareto optimal, and a Pareto-optimal outcome need not be a Nash equilibrium. 3. In the Prisoners' Dilemma game, the only outcome that is not Pareto optimal is also the game's only Nash equilibrium. 4. When a game is played sequentially, the first player will have an advantage over the second player. 5. A Cournot equilibrium arises when one player announces his strategy before the other.
The theory of purchasing power parity suggests that, in the long-run, exchange rates are determined by ________
A) relative interest rate levels B) relative price levels C) the GDP values for the two countries D) the most significant monetary authorities, including the Federal Reserve, European Central Bank, Bank of England and the Bank of Japan
If the elasticity of labor demand is greater than one, then imposing a minimum wage above the equilibrium wage will cause:
A. the firms' total wage bill to rise. B. the firms' total wage bill to fall. C. employment to rise. D. no adverse employment effects.
The market supply curve can be derived by
A) vertically adding the individual supplies at each quantity level. B) multiplying the price and quantity supplied at each price level. C) horizontally adding the individual supplies at each price level. D) looking at the capacity utilization in the largest firms in the industry.