If the Cost of Using an Additional Unit of Capital

question 53

Multiple Choice

If the cost of using an additional unit of capital equipment is $24,000 and the marginal product of a unit of capital is 144,000 units of output, this means that for each additional dollar spent on capital, there is a gain of __________ units of output.

• A)3
• B)0.167
• C)6
• D)12

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Definitions:

Good Faith Purchaser

A Good Faith Purchaser is someone who buys property without knowledge of any existing claims or encumbrances against it, thus acquiring legal rights to the property.

Voidable Title

A legal term referring to a situation where a transfer of title to property can be invalidated due to certain circumstances, such as fraud or misrepresentation, giving the affected party the right to void the transaction.

CIF

Cost, Insurance, and Freight, a trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination, and provide the buyer with the documents necessary to obtain the goods.

Voidable Title

A legal status of property ownership that can be declared invalid by one of the parties involved, due to factors such as fraud or coercion at the time of acquisition.