If Grazing Land Is Used by All Individuals on a Free

question 29

Multiple Choice

If grazing land is used by all individuals on a free open range, they will operate until the

• A)AP of the land equals the opportunity cost of the input.
• B)MP of the land equals the opportunity cost of the input.
• C)TP of the land equals the opportunity cost of the input.
• D)MP of the land is larger than the opportunity cost of the input.

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Definitions:

Surplus Funds

Excess money or assets that remain after all expenses have been paid.

Maturing

The process by which a financial instrument reaches its due date and the principal is required to be repaid.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the principal.

Economic Equivalent

A financial concept that refers to the equivalence in value between different sums of money received or paid at different times, based on a specified interest rate.