Firms will invest in new equipment whenever:
A. public saving is greater than private saving.
B. the expected cost of the equipment exceeds the expected benefit.
C. the expected cost of the equipment is less than the expected benefit.
D. the expected cost of the equipment is greater than the value of the marginal product of the equipment.
Answer: C
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If s denotes savings rate, I denotes aggregate investment, and Y denotes GDP, then which of the following equations is correct?
A) I = s × Y B) I =s/Y C) I = Y/s D) Y = s × I
Which of the following is definitely true for a per-unit tax in the goods market where neither demand nor supply is perfectly inelastic:
A. The more price inelastic demand is, the lower deadweight loss will be. B. The more price inelastic supply is, the higher deadweight loss will be. C. A demand become more price inelastic, the after tax price for consumers rises. D. Both (a) and (b) E. Both (b) and (c) F. Both (a) and (c) G. All of the above H. None of the above
Toothpaste and toothbrushes are complements, so the ________ elasticity of demand is ________
A) cross; positive B) income; negative C) cross; negative D) income; positive
Firms in a given industry are affected by the tariff imposed on the product they sell, but not by the tariffs imposed on their purchased inputs.
Answer the following statement true (T) or false (F)