When the opportunity cost of capital is matched with the benefits from adding to the capital stock, the marginal product of capital, we have:
Select one:
a the optimal production function
b the optimal stock of capital
c the optimal combination of primary factors of production
d the optimal stock of assets
If total production in the economy is described by the Cobb-Douglas production function Y=AKaL1-a and a = 025, then the share of output going to capital is:
Select one:
a 075
b 025*Y
c 025
d 075*Y
Australia’s recent large trade deficits:
Select one:
a are not unusual compared with earlier years and should not pose a problem as long as the foreign savings are well invested in the Australian economy
b are a result of unfair trading practices by Australia’s trading partners and pose a serious problem for Australian policy makers
c are a serious policy problem as they reflect speculative investments that are unlikely to provide sufficient returns
d are unusual compared with earlier years and reflect large government budget deficits
