If the Marginal Product of Capital Is Constant

question 14

Multiple Choice

If the marginal product of capital is constant,

• A) output does not increase when more capital is used in production
• B) technological progress cannot shift the production function
• C) investment is always equal to depreciation
• D) the economy does not reach a steady state
• E) the stock of capital never changes

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Definitions:

Business Firms

Organizations involved in the production, distribution, or sale of goods and services for profit.

Large Firms

Companies that operate on a large scale, often having significant market power, extensive operations, and substantial revenues.

Collusion

An agreement between two or more parties, often competitors, to limit competition and manipulate prices or terms of trade to their advantage.

Industry

A group of companies or organizations involved in the production or supply of goods and services in a particular area of the economy.