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Which of the following is not a form of capital

  Which of the following is not a form of capital?

a.loanable funds

b.John Deere farm machinery

c.sourdough used to make bread

d.sourdough bread on your Thanksgiving dinner table

e.sourdough bread used to make a tuna sandwich at Timpone’s restaurant

102.              The main distinction between loanable funds and capital equipment is that

a.capital equipment has a measurable productivity, while loanable funds do not

b.capital equipment is less divisible and unalterable in the short run

c.loanable funds have an associated price (the interest rate), while capital equipment
does not

d.capital equipment may earn rents in production, while loanable funds do not

e.there are no opportunity costs associated with the investment in capital equipment

103.              The marginal cost of a dollar of loanable funds is not

a.the interest rate

b.the same as the marginal physical product of capital

c.a measure of the marginal cost of capital

d.equal to the marginal revenue product of capital at the firm’s profit-maximizing
quantity of loanable funds

e.the change in a firm’s total cost that results from adding one more dollar of loanable
funds to production

104.              Which of the following is not true with respect to the rule used to determine the firm’s
                            profit-maximizing quantity demanded of capital?

a.It is similar to the rule used to determine the firm’s profit-maximizing quantity
demanded of labor.

b.It is similar to marginal labor cost divided by marginal revenue.

c.It takes the interest rate into consideration.

d.It equates marginal revenue product of capital to marginal factor cost.

e.It equates the present value of capital to expected future rents.

105.              In a perfectly competitive capital market, when the firm’s marginal revenue product of
                            capital exceeds the market interest rate, the

a.firm is maximizing profit

b.firm should increase its quantity demanded of loanable funds

c.firm should decrease its quantity demanded of loanable funds

d.capital market is in equilibrium

e.firm should reduce the rate of interest

Dec 11 2019 View more View Less

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