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If the Cost of Using an Additional Unit of Capital

Question 27

Multiple Choice

If the cost of using an additional unit of capital equipment is $5,000 and the marginal product of a unit of capital is 2,000 units of output, this means that for each additional dollar spent on capital, there is a gain of _________ units of output.


A) 5
B) 0.4
C) 2.5
D) 2

Correct Answer:

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