Capital is a factor of production. An example of capital as a factor of production is

Assume that Michael is interested in buying a lawn mower. Right now, interest rates are very high, but he believes they will soon start to fall. If Michael purchases the lawn mower today, we know that

a. he was concerned about future inflation. b. the current inflation rate was low. c. he paid an inflationary premium. d. he had a strong, positive rate of time preference.

An increase in demand will increase equilibrium price to a greater extent:

A. if the product is a normal good. B. if the product is an inferior good. C. the less elastic the supply curve. D. the more elastic the supply curve.