A firm should cut back on investing if
A. the MRPK is less than the price of capital.
B. the MRPK is equal to zero.
C. the MRPK is greater than the price of capital.
D. the MRPK is equal to the price of capital.
Answer: A
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Which of the following are equivalent terms?
a. The absence of structural unemployment and the absence of cyclical unemployment b. Normal employment and the absence of structural unemployment c. Full employment and the absence of cyclical unemployment d. Normal employment and the absence of frictional unemployment e. Null employment and the absence of frictional unemployment.
When we compare economic welfare in a monopoly market to a competitive market, the profits earned by the monopolist represent
a. a loss in total welfare. b. a transfer of benefits from the buyer to the seller. c. the higher marginal costs incurred by the monopolists in comparison to competitive firms. d. All of the above are correct.
If the nominal interest rate is 8 percent and the real interest rate is 5.5 percent, then the inflation rate is
a. -2.5 percent. b. 0.45 percent. c. 2.5 percent. d. 13.5 percent.
The psychological rewards of inventing a new product generally result in ____ profits for entrepreneurs.
A. below average B. only average C. above average D. indeterminate