In economics, the term "free market" refers to a market where no sales tax is imposed on products sold

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

A.  Undertake the investment because the expected rate of return of 12 percent is greater than the real rate of interest B.  Undertake the investment because the expected rate of return of 10 percent is greater than the real rate of interest C.  Undertake the investment because the expected rate of return of 9 percent is greater than the real rate of interest D.  Not undertake the investment because the expected rate of return of 7 percent is less than the real rate of interest

The market

A. Always provides the optimal mix of goods and services. B. On its own may not always provide the optimal mix of goods and services. C. Always provides a better mix of goods and services without government intervention than it does with government intervention. D. May not produce the optimal mix of output, which is known as government failure.