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- What are the two components of the user cost of capital? What is a capital good for both of the componenets?Explain why the optimal stock of capital chosen by firms is such that the marginal productivity of capital is equal to one plus the real interest rate.ll of the following will cause a shift in the demand curve for capital EXCEPT: A change in sales expectations. the interest rate. changes in labor prices. technological change.
- Do you agree that capital is topmost factor under the category of resources? Why? Please explain and justify your answers. When it comes to knowledge on customers' needs and expectations, does the three variables such as observations, interviews, and market research are really factors in product development? Why? Kindly elaborate your answers per variable.Can you derive the fundamental equation governing the evolution of capital in an OLG model with households with inheritance and bequestsWhat is the Capital-Recovery Factor?
- Describe nonsimple investment?After reading the given descriptions, please place the correct label by the quadrant on the graph that best describes each person's position in the market for loanable funds. Jolien decides not to take out a loan to fund expanding her grocery store because she projects it will only earn a return of 4%4%. Osi closely follows the market for United States Treasury Bonds. He is willing to invest in them anytime the rate of return is 5%5% or higher, and sees that this is the case. In order to open a new car wash facility expected to return 13%13%, Julius secures a loan. John will shift his stock investments to corporate bonds when they return at least 10%10%. They do not, so he stays with stocksDiscuss why you would expect the saving-borrowing pattern to differ by occupation (for example, for a doctor versus a plumber).
- Some studies have found that saving is not very sensitive to the rate of return on saving. a.true b.falseJoanne has just completed high school and is trying to determine whether to go to communtiy college for two years or go directly to work. Her objective is to maximize the savings she will have in the bank five years from now. If she goes directly to work, she will earn $18,500 per year for each of the next five years. If she goes to community college, for each of the next two years she will earn nothing—indeed, she will have to borrow $6,000 each year to cover tuition and books. This loan must be repaid in full three years after graduation. If she graduates from community college, in each of the subsequent three years, her wages will be $35,000 per year. Joanne’s total living expenses and taxes, excluding tuition and books, equal $15,000 per year. Joanne should go to (Click to select) work junior college , since the total value of Joanne's savings would be $__ if she goes directly to work and $__ if she goes to community college.Is this change labor saving, capital saving, or neutral?
