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.

---

Definitions:

Financial Leases

Long-term leases that effectively transfer the risks and rewards of ownership from the lessor to the lessee, almost like a loan arrangement.

Amortized

Refers to the process of gradually writing off the initial cost of an asset over a period.

Capitalized

Expenses or costs that are recorded as an asset on a balance sheet rather than an expense, to be amortized or depreciated over time.

Financial Lease

A financial lease is a lease agreement where the lessee assumes both the ownership risks and rewards of the leased asset, typically for its useful life.