A factor of production that is produced in order to produce something else is called:
A) money.
B) labor.
C) technology.
D) capital.
Ans: D) capital.
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As the housing bubble began to collapse, the wave of initial foreclosures led to:
A. banks no longer offering refinancing as an option, and home sales slowed. B. more foreclosures due to the herd instinct. C. more household saving in other forms. D. banks flooding the market with homes for sale, further depressing their price.
Investment in health care does bear similarities to investment in human or physical capital
a. True b. False Indicate whether the statement is true or false
The tax multiplier is equal
What will be an ideal response?What will be an ideal response?
A firm's average cost increases as it increases its output by expanding its plant and hiring additional workers (its only inputs to production). The firm's owner blames the increase in per-unit costs on the law of diminishing marginal productivity. The owner's reasoning is:
A. incorrect because all inputs are varied in the example. B. correct because some inputs are fixed in the long run. C. correct because marginal productivity must decrease in the short run. D. incorrect because economies of scale are present.