Saying a Firm Will Continue Investing Up to the Point

question 111

Multiple Choice

Saying a firm will continue investing up to the point at which ________ is equivalent to saying that a firm will keep investing in new capital up to the point where the expected rate of return is equal to the interest rate.

• A) the marginal product of capital is equal to the marginal product of labor
• B) the interest rate is equal to the inflation rate
• C) the marginal revenue product of capital is equal to its rental cost
• D) the return on capital is equal to depreciation

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Definitions:

Demand for Labor

The total amount of workers that employers want to hire at a given wage rate, in a given time period.

Union Membership

Involvement in an organized association of workers formed to protect and further their rights and interests in the workplace.

Labor Force

The total number of people, both employed and unemployed, who are actively looking for work in the economy.

Inclusive Union

A labor union that aims to represent all workers within a particular industry or workplace, regardless of job or skill level, focusing on broad inclusivity.