Any factor of production is capital if it:
A) was produced and can be used to produce other goods and services.
B) generates utility.
C) uses human effort to produce goods and services.
D) is included in financial capital.
Ans: A) was produced and can be used to produce other goods and services.
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In the Gordon growth model, a decrease in the required rate of return on equity
A) increases the current stock price. B) increases the future stock price. C) reduces the future stock price. D) reduces the current stock price.
Regulators employ average cost pricing instead of marginal cost pricing because
A) average cost pricing is more efficient than marginal cost pricing. B) price must be high enough to cover all opportunity costs if the firm is to stay in business. C) the price is lower with average cost pricing. D) average cost pricing is simpler to compute than marginal cost pricing.