Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 27, Problem 3CQ
To determine
Physical and human capital investment.
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If Net Investment = 0 in a given year, this indicates that we have neither lost nor gained capital. That seems to be a desirable outcome. Do you agree?
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Chapter 27 Solutions
Economics: Private and Public Choice (MindTap Course List)
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- Explain the term capital in deptharrow_forwardWhat are the two components of the user cost of capital? What is a capital good for both of the componenets?arrow_forwardExplain 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.arrow_forward
- 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.arrow_forwardExplain Three ways that a reduced rate of interest influences real capital investment.arrow_forwardWrite the production function in its simplest form (human capital being included in TFP) and explain the nature of each factor as well the theoretical value of the parameter Alpha. In other words what does the value of Alpha represent regarding the returns of each factors of production?arrow_forward
- A competitive capital market is important to society because it directs resources toward projects that a.have an outcome that is known with certainty. b.create wealth. c.can be completed quickly. d.reduce the value of the resources employed.arrow_forwardDo 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.arrow_forwardWhat is the Capital-Recovery Factor?arrow_forward
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