The Equilibrium Price of Capital

question 59

Multiple Choice

The equilibrium price of capital

• A)is not affected by a government subsidy on the rental of capital by firms.
• B)decreases if the government subsidizes the rental of capital by firms because the demand curve for capital shifts to the left.
• C)increases if the government subsidizes the rental of capital by firms because the demand curve for capital shifts to the right.
• D)increases if the government subsidizes the rental of capital by firms because the supply curve for capital shifts to the left.
• E)decreases if the government subsidizes the rental of capital by firms because the supply curve for capital shifts to the right.

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Definitions:

Semiarid Zones

Regions characterized by light rainfall, usually between 10 and 20 inches per year, often resulting in scanty vegetation and a steppe climate.

Terrestrial Biomes

are large community units, distinguished by their predominant vegetation and are adapted to specific climate conditions on Earth, such as forests, deserts, and grasslands.

Alpine Tundra

A biome found in the high mountain regions of the world, above the tree line, characterized by windswept landscapes, low temperatures, and minimal vegetation.

Tree Line

The highest elevation or latitude line beyond which trees are unable to grow due to unsuitable environmental conditions, such as cold temperatures or lack of moisture.