ECON 1...U22 (1) - Saved ECON 101 ASSIGNMENT #3 1. Fill in the blanks to make the following statements correct. a. A fir

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Econ 1 U22 1 Saved Econ 101 Assignment 3 1 Fill In The Blanks To Make The Following Statements Correct A A Fir 1 (47.59 KiB) Viewed 27 times

ECON 1...U22 (1) - Saved ECON 101 ASSIGNMENT #3 1. Fill in the blanks to make the following statements correct. a. A firm's demand for financial capital is derived from its demand for b. A firm that decides to invest in additional machinery will its requirements for financial capital c. An increase in the marginal product of capital will lead firms to their desired capital stock and therefore their demand for financial capital. d. An increase in the interest rate will capital's MRP and therefore, the present value of firms' desired capital stock. in the quantity of financial capital The result will be a demanded by firms. e. An increase in capital's MRP results in a in the economy's investment demand curve, whereas an increase in the interest rate results in a the economy's investment demand curve. 2. Fill in the blanks to make the following statements correct. a. The marginal cost faced by the private decision maker is know as The marginal cost faced by the private decision maker plus any other costs imposed on third parties is known as If there is a divergence between these two marginal are present. b. The marginal benefit to consumers from using some good or service is The marginal benefit to the consumers plus any benefits accruing to third parties is known as costs, then we can say that known as A is present if private marginal benefits are less than social marginal benefits. c. An economic outcome is allocatively efficient when marginal social cost and marginal social benefit are d. Suppose a potato chip plant is operating beside a residential neighbourhood and produces noise and an unpleasant odour. We can say that there is a externality because the marginal social cost of producing potato chips is the marginal private cost of producing potato chips. As a result, the free market is producing too potato chips.