The Price of a Factor of Production That Is in Fixed

question 72

Multiple Choice

The price of a factor of production that is in fixed supply is called

• A)economic rent.
• B)economic profit.
• C)a compensating differential.
• D)opportunity cost.

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Definitions:

Debt-Equity Ratio

This ratio measures the balance between financing a company's assets with equity compared to debt.

Degree of Financial

The measure of a firm's financial leverage, indicating the level of financial risk by comparing debt to equity or assets.

Net Income

The profit of a company after all expenses, taxes, and costs have been subtracted from total revenue, indicating the actual profit earned during a specific period.

Interest Expense

The expense an entity faces over time for borrowing funds.