The tables above show the labor market and the production function schedule for the country of Pickett. Potential GDP is ________

Which of the following describes the reason why scarcity exists?

A. Governments make bad economic decisions. B. The gap between the rich and the poor is too wide. C. Wants exceed the resources available to satisfy them. D. There is too much unemployment.

A higher interest rate will lead a firm to purchase less capital because the higher interest rate

a. lowers the marginal product of capital goods b. causes technological change to cease c. lowers the present value of capital goods d. causes economies of scale to be exhausted e. causes the capital market become monopolized