Capital, as economists use the term,
A. is the money the firm spends to hire resources.
B. refers to things that have already been produced that are in turn used to produce other goods and services.
C. is money the firm raises from selling stock.
D. refers to the process by which resources are transformed into useful forms.
Answer: B
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Varying the quantity of output produced and sold at preset prices is called:
A. self-correcting economics. B. Say's law. C. meeting demand. D. spurring inflation.
In an article, "Preparing for the Next Black Swan" (Wall Street Journal, Aug 21, 2010), the point is made that diversification may be insufficient in protecting one's portfolio during a "Black Swan" event. Why may this be true?
A) virtually all asset classes may decline at the same time B) investors may be unable to buy different assets during a "Black Swan" event C) some assets may rise while others decline during a "Black Swan" event D) Black Swan events are surprises and thus one cannot prepare for such an event.
To minimize total costs for a particular rate of output, a firm will equate
A) the average cost of each factor. B) the marginal revenue of each factor. C) the marginal physical product per dollar spent on each factor. D) the marginal revenue product and variable marginal revenue for each factor.
Invention is the discovery of a new process or idea. Innovation is
a. the continuing search for inventions. b. copying ideas from rival firms. c. putting an invention to work. d. basic research.