Q1、With regard to demand and supply in factor markets, which of the following statements is least accurate? A) The demand for financial capital and physical capital tends to be inversely related. B) All else being equal, the supply of financial capital will increase as incomes or interest rates increase. C) Marginal revenue is the gain from the sale of an additional unit, whereas marginal revenue product is the revenue gain from employing one more unit of a productive resource.
Q2、Which of the following choices most accurately states the relationship between the demand for physical capital and the demand for financial capital? Greater demand for: A) physical capital causes greater demand for financial capital. B) financial capital causes greater demand for physical capital. C) financial capital implies less demand for physical capital.
Q3、A firm should continue adding to its capital until the marginal revenue product of capital is: A) equal to the marginal revenue product of labor. B) equal to the cost of capital. C) greater than the cost of capital.
Q4、Which of the following is least likely to be an example of a firm’s physical capital: A) productive machinery that has been fully depreciated. B) undeveloped land. C) proceeds from a bond issued to construct a new plant.
Q5、Lynxville Manufacturing has just implemented a new logistics system that will allow it to operate with a 30% smaller inventory of goods in process. What effects will the new process most likely have on Lynxville’s demand for physical capital and on its demand for financial capital? Demand for Physical Capital Demand for Financial Capital
A) Decrease Decrease B) Increase Increase C) Decrease Increase
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