The Demand for Capital Is Similar to the Demand for Labor

question 232

Multiple Choice

The demand for capital is similar to the demand for labor in that

• A)the marginal product of labor is derived from the marginal product of capital.
• B)the marginal revenue product curve for labor is the same as the marginal revenue product curve for capital.
• C)both are derived demands.
• D)both are inelastic at high prices and elastic at low prices.

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Definitions:

Bonus

Additional compensation given to employees as a reward for their performance, often beyond their regular earnings.

Capital Balances

Refers to the amount of money that the owners of a company have invested in the business or retained from profits over time.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenues.

Closing the Revenue

The process of finalizing all revenue accounts and transferring their balances to permanent accounts at the end of an accounting period.