The marginal revenue product of capital is
A) the change in the firm's revenue as a result of employing one more unit of capital, such as a machine.
B) the economic rent received by hiring an additional unit of capital.
C) the cost to the firm of renting an additional unit of capital.
D) the revenue generated by substituting capital for labor in the production process.
A
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Real business cycle theory states that the most important cause of business cycles is
A) shocks to the money supply. B) interest rate shocks. C) Federal Reserve policy decisions. D) shocks to tastes and technology.
In the circular flow model, injections and leakages are associated with
a. saving and investment. b. consumption and investment. c. realized investment and desired investment. d. saving and taxes.
Securitization is the practice of:
A. packaging individual debts into a single uniform asset that can be easily bought and sold. B. the government guaranteeing repayment of risky home loans made to individuals with lower credit. C. borrowing based on expected future earnings. D. backing a security with a riskless asset.
Assume that for a given consumer, the marginal utility of cheap food is 100 and the price of cheap food is $40. Also, assume that the marginal utility of environmental quality is 200 and the price of environmental quality is $100. This consumer:
A) Should buy more environmental quality. B) Is in equilibrium. C) Should buy more cheap food. D) Can't tell; insufficient information given to answer this question.