Holding Labor Constant, What Do You Notice About the Marginal

question 4

Multiple Choice

Holding labor constant, what do you notice about the marginal productivity of capital?

• A) The marginal productivity of capital is always increasing.
• B) The marginal productivity of capital is always constant.
• C) The marginal productivity of capital is always decreasing.
• D) The marginal productivity of capital increases, then decreases.

---

Definitions:

Market Beta

measures the volatility of an investment or portfolio relative to the overall market, indicating its sensitivity to market movements.

Treasury Bills

Short-term government securities issued at a discount from their face value, with maturities typically less than a year.

Unsystematic Risk

The risk associated with a particular company or industry, also known as idiosyncratic risk or specific risk.

Retail Industry

The sector of the economy that sells consumer goods directly to customers.