The Presence of Capital Rental Markets Gives Firms

question 152

Multiple Choice

The presence of capital rental markets gives firms:

• A) the ability to hire more labor in periods of high demand by keeping capital costs fixed.
• B) reduced flexibility in substituting among various labor and capital inputs.
• C) the ability to hire more capital in periods of high demand by keeping capital costs fixed.
• D) the flexibility to adjust capital usage to output levels, making capital costs variable.

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Definitions:

Adjustment Bias

A cognitive bias affecting decision-making, where individuals depend too heavily on initial information or adjustments from a reference point.

Lack-of-participation Error

A mistake or oversight occurring when individuals or groups do not contribute or engage in a required or expected activity.

Design Thinking

A problem-solving approach that focuses on empathy with users, a discipline of ideation, and iterative testing of solutions, widely used in product design and innovation.

Organizational Culture

The shared values, beliefs, and norms that influence the behavior of individuals within an organization.