When the marginal rate of return expected from a purchase of equipment is less than the market interest rate, then the firm should
a. seek government assistance in decreasing the market interest rate
b. inform stockholders that the company can expect increased earnings from the purchase
c. either purchase or not purchase the equipment depending on the marginal resource cost of the equipment
d. purchase the equipment
e. not purchase the equipment
E
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Non-activists believe that postwar instability is primarily the result of
A) erratic growth of private investment. B) uneven changes in real government expenditures. C) uneven changes in private consumption of durables. D) A and C are both correct.
Which of the following is an example of a negative externality?
A) There is an increase in injuries to pedestrians caused by accidents resulting from electronic billboards distracting drivers. B) The opening of a new shopping mall increases the business of nearby restaurants. C) A consumer pays a higher price than another consumer does for the same product. D) Consumers pay a sales tax in addition to the price of a product.