For This Question,assume That There Are Decreasing Returns to Capital,decreasing

question 32

Multiple Choice

For this question,assume that there are decreasing returns to capital,decreasing returns to labor,and constant returns to scale.A reduction in the capital stock will cause which of the following?

• A)a reduction in output
• B)no change in output
• C)an increase in output per capita
• D)increase the capital-labor ratio
• E) none of the above

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Definitions:

Goodwill

An intangible asset that arises when a business is acquired for more than the sum of its identifiable net assets.

Equity Income

Income earned by an investor from an investment in the stock of a company, typically through dividends and the investment's appreciation in value.

Annual Review

A periodic evaluation process, often yearly, used to assess an individual's or organization's performance, financial state, or the status of a certain project.

Acquisition-Date Fair Value

The estimated market value of an asset or liability at the date a transaction is completed or an acquisition is made.