In the Short Run,a Firm Cannot Change the Amount of Capital

question 268

Multiple Choice

In the short run,a firm cannot change the amount of capital it uses.Therefore the cost of capital is a

• A) short-run cost.
• B) variable cost.
• C) productivity cost.
• D) fixed cost.
• E) marginal cost.

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Definitions:

Explicit Benefit-reduction Rate

The specified rate at which benefits decrease as income or other factors change, often related to welfare policies.

Incidence of Poverty

The proportion or rate of a population living below the poverty line, indicating the extent of poverty in a given area.

Married-couple Families

Families consisting of a husband and wife as the main household members, possibly with children.