1. A firm will take on more investment projects as: A. The rate of return on pro
ID: 1100428 • Letter: 1
Question
1. A firm will take on more investment projects as:
A. The rate of return on projects falls.
B. The marginal revenue product of capital decreases.
C. The cost of capital rises.
D. The interest rate falls.
2.Which of the following is TRUE of profits?
A. An accountant would calculate profits in the same way as an economist would.
B. Only (a) and (d) are true.
C. Profits are equal to total revenue minus total cost.
D. A firm MUST earn positive ECONOMIC profits in order to stay in the business in the long run.
E. There is no guarantee that an entrepreneur or a business firm will make positive profits.
3.Profits are earned by entrepreurs who:
A.All of the above are true.
B.Have succeeded in putting a new invention or existing product/technology to practical commercial uses.
C. Have managed to produce a good/service that has no good substitutes (that is, the entreprenuer is a monopolist).
D.Have organized the factors of production (land, labor and capital) to successfully produce and sell a good/service.
4.Which statement is TRUE?
A.The economic value of a plot of land is only determined by the value of the raw materials that is in/on the land.
B.All land has the same economic value.
C.The rent on a particular piece of land is based on the value of the buildings on that land.
D.The supply of land is fixed in the short run.
5. An entrepreneur who is an innovator is someone who has invented a new idea, a new product and/or a new way of producing things.
True or False?
Explanation / Answer
1,C. The cost of capital rises.
2.B. Only (a) and (d) are true.
3.A.All of the above are true.4.
4.C.The rent on a particular piece of land is based on the value of the buildings on that land.
5.true
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.