The costs of investment depend on the ________ and the ________.
A. relative price of the firm's output; real interest rate
B. price of new capital goods; real interest rate
C. taxes levied on the revenue generated; relative price of the firm's output
D. marginal product of capital; relative price of the firm's output
Answer: B
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Jane is a 25-year-old, full-time student. She works part time in her school library and is paid $7 an hour. She is considered to be
A) unemployed. B) not in the labor force. C) in the labor force but not working. D) employed. E) not in the working-age population because she is in college.
The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
The demand for tobacco is price inelastic. Suppose there is a drought that destroys a large portion of the tobacco crop
What will happen in the market for tobacco? Will the equilibrium price and quantity change? If so, how? What will happen to the total revenue earned by tobacco farmers?
If monopolistically competitive firms earn short-run economic profits, we expect to see
A) new firms enter the industry, which shifts the demand curves of the existing firms to the left until firms earn zero economic profits. B) new firms trying to enter the industry, but unable to do so because of barriers to entry. C) existing firms altering their scale of plant to try to capture larger profits. The combined effect is to cause all firms to earn zero economic profits. D) existing firms increasing prices to try to capture larger economic profits.