If a firm's expected marginal product of capital exceeds its tax-adjusted user cost of capital, the firm will
A. not change its investment spending on capital goods.
B. increase its investment spending on capital goods.
C. reduce its investment spending on capital goods.
D. increase the tax-adjusted user cost of capital.
Answer: B
You might also like to view...
If the good in the table above is a public good and Pat and all are the only members of society, then the efficient quantity to produce is
A) 2 units. B) 3 units. C) 4 units. D) 5 units.
Ted's Pancake Kitchen suffers a short-run loss. When should Ted decide to shut down rather than continue to produce?
A) if his Kitchen's revenue is less than its fixed costs B) if his Kitchen's revenue is less than its total costs C) if his Kitchen's revenue is less than its variable costs D) if his Kitchen's revenue is less than its explicit costs
Which of the following is considered to be a cost of information?
a. The price of the commodity for which information is collected. b. The time spent to collect the information. c. The difference in price charged by different sellers for the same commodity. d. The difference in price paid by different buyers for the same commodity.
If a consumer has allocated income between pizzas and movies such that utility is maximized, and the price of pizza falls, when equilibrium is restored this consumer will:
a. consume less pizzas and the same amount of movies. b. consume less pizzas and more movies. c. consume more movies. d. consume more pizza.