If the Value of Marginal Product of Capital Decreases as More

question 18

Multiple Choice

If the value of marginal product of capital decreases as more capital is employed,then the

• A)supply curve of capital is upward sloping.
• B)supply curve of capital is downward sloping.
• C)demand curve for capital is horizontal.
• D)demand curve for capital is downward sloping.
• E)demand curve for capital is upward sloping.

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Definitions:

Net Investment

The total amount spent by a company or economy on capital assets, minus depreciation.

Autonomous Consumption

Consumption expenditure that occurs when income levels are zero, reflecting basic survival expenses.

International Oil Price

The cost per barrel of crude oil on the global market, influenced by supply and demand, geopolitical events, and other factors.

Adverse Supply Shock

An unexpected event that suddenly decreases the supply of a commodity or service, leading to increased prices and reduced output.