Question 1
You are certain that a normal rate of return is 18% for the computer industry. What do you expect for a normal rate of return in the computer software industry, which is considered to be much riskier than the computer industry?
◦ 18%
◦ Less than 18%
◦ Above 18%
◦ The rate on government bonds
Question 2
The formula for the marginal product of labor is
◦
L/
q.
◦ (Δ
L)(Δ
q).
◦
q/
L.
◦ Δ
q/Δ
L.