The Interest-Rate Cost-Of-Funds Curve Is Perfectly Elastic Because Firms Can

question 7

True/False

The interest-rate cost-of-funds curve is perfectly elastic because firms can borrow as much or as little as they want at market interest rates.

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Definitions:

Marginal Physical Product

The additional output produced by adding one more unit of a factor of production, such as labor, while keeping all other factors constant.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource or input.

Total Revenue Product

The overall income generated by a firm from selling its output, factoring in the quantity of output sold and the price per unit.

Marginal Physical Product

The additional output that results from using one more unit of a factor of production, keeping other factors constant.