A business spends $10 million on new capital equipment, and during the same year, $7 million of its existing capital wears out. Which of the following is correct?
a. The firm's gross investment is $7 million, and its net investment is $10 million.
b. The firm's gross investment is $3 million, and its net investment is $7 million.
c. The firm's gross investment is $7 million, and its net investment is $3 million.
d. The firm's gross investment is $10 million, and its net investment is $3 million.
D
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The GDP deflator is designed to adjust nominal GDP
a. for changes in the unemployment rate. b. for changes in prices. c. for problems that arise because of externalities. d. for changes in interest rates.
Which of the following statements is not correct?
a. Common resources are rival in consumption but are not excludable. b. Uncongested toll roads are examples of club goods. c. When African elephants were privatized, the survival of the species deteriorated. d. National defense is not rival in consumption, nor is it excludable.
Exhibit 2-2 Production possibilities curve
In Exhibit 2-2, the opportunity cost of coffee when moving from A to B is:
A. the same as moving from A to C. B. the same as moving from A to D. C. the same as moving from B to D. D. the same as moving from B to C.
Why is the demand for a perfectly competitive firm's good perfectly elastic even though the market demand is not?
What will be an ideal response?