1. Which of the following can be thought of as an adjustment for the risks involved with respect to the cost of a firm acquiring financial capital?
- Higher retained earnings from past profits
- Cost of financial capital paid from firm
- Imposition of hurdle rates of interest
- Tax credits for physical capital investments
2. If a firm is producing so that the point chosen along the production possibility frontier is socially preferred, then that firm is said to have reached its
- Utility-maximizing efficiency
- Locative efficiency
- Minimum price efficiency
- Productive efficiency
3. When a firm uses retained profits to invest in more energy efficient equipment, an economist would calculate the _______________ of investing in physical capital.
- Degree of risk
- Opportunity cost
- Typical hurdle rate
- Hurdle rate premium
4. Deregulation occurs when a government eliminates or scales back rules relating to all but one of the following. Which one is it?
- Prices that can be charged
- Quantities that can be produced
- Conditions of entry in a certain industry
- Natural monopoly
5. A natural monopoly occurs when the quantity demanded is the minimum quantity it takes to be at the bottom of the long-run average cost curve
- Less than
- Greater than
- Equal to
- a or c above
6. The demand curve perceived by a perfectly competitive firm
- Shows economies of scale over a large range of output
- Shows that such a firm is a price-maker
- Is horizontal
- All of the above