The amount of gross investment in the economy depends on the
A) response of expected output to the error in estimating the past period's actual output.
B) amount of the difference between the desired capital stock and last period's capital stock that can be put in place this period.
C) fraction of the capital stock that is replaced each period.
D) All of the above are correct.
D
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Which of the following will result from an epizootic affecting sheep reared for wool?
a. The epizootic would lower people's preference for woolen clothes. b. The price of new woolen clothes would rise. c. The epizootic would lower people's preference for synthetic coats. d. The production of new woolen clothes would rise.
Exhibit 7-11 A firm's cost and marginal revenue curves
?
In Exhibit 7-11, when the price drops below $2, the profit-maximizing (or loss-minimizing) firm:
A. should shut down and produce zero. B. should produce output equal to 4. C. is making an economic profit of $8. D. should try to produce more output.