When Calculating the Marginal Product of Capital, Which of the Following

question 109

Multiple Choice

When calculating the marginal product of capital, which of the following conditions must be met?

• A) The total number of units of capital employed has to be constant.
• B) All other inputs must remain fixed.
• C) Other inputs must be varied in the same proportion as capital.
• D) Total output must be held fixed by assumption.

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Definitions:

Fair Value

An estimate of the market value of an asset or liability, based on current market prices.

Probable Future Sacrifices

The expected relinquishment of assets as a result of obligations.

Liabilities

Economic obligations or debts owed by a business to others, typically arising in the course of its operations.