A firm invests in a new machine that costs $2,000 a year but is expected to produce an increase in total revenue of $2,200 a year. The current real rate of interest is 8%. The firm should

A. undertake the investment, because the expected rate of return of 9% is greater than the real rate of interest.
B. not undertake the investment, because the expected rate of return of 7% is less than the real rate of interest.
C. undertake the investment, because the expected rate of return of 12% is greater than the real rate of interest.
D. undertake the investment, because the expected rate of return of 10% is greater than the real rate of interest.


Answer: D

Economics

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A) buy more pizza and fewer CDs. B) buy more CDs and fewer pizza. C) buy more of both goods. D) stay with the current combination of goods.

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What will be an ideal response?

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By selecting a bundle where MRS = MRT, the consumer is

A) achieving a corner solution. B) reaching the highest possible indifference curve she can afford. C) not behaving in an optimal way. D) All of the above.

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A. ideas drive economic growth. B. capital drives economic growth. C. invention drives economic growth. D. government drives economic growth.

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