It Is Useful to Think of Physical Capital in Terms

question 28

Multiple Choice

It is useful to think of physical capital in terms of a variable,.

• A)stock; because any flow of investment adds to the current capital stock
• B)stock; because most equipment is solidly built
• C)stock; depending on the context
• D)flow; because it is usually put in place and maintained over a long period of time
• E)flow; because its usefulness lasts over a long period of time

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Definitions:

Returns to Scale

The change in output as a result of proportionately changing all inputs in the production process, indicating increasing, constant, or decreasing returns.

Marginal Cost

An uplift in the sum total of costs incurred by producing another unit of a product or service.

Average Fixed Cost

The fixed costs of production (such as rent and salaries) divided by the number of goods produced; it decreases as output increases.

Mixers

Devices or software used for blending different audio signals together, often used in music production, live performances, and broadcasting.