Money Is an Example of a Scarce Factor of Production

question 62

True/False

Money is an example of a scarce factor of production.

Understand the concept of perfect competition in input and output markets.

Calculate and analyze the average and marginal product of labor.

Interpret the effects of wage changes on consumer's choice between income and leisure.

Determine the marginal revenue product of labor.

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Definitions:

Price/Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, indicating the dollar amount an investor can expect to invest in a company in order to receive one dollar of that company’s earnings.

Interest Rates

The proportion of a loan charged as interest to the borrower, typically expressed as an annual percentage of the loan outstanding.

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power over time.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.