Speculators who believe the world-wide demand for cocoa products is going to increase enormously next year will cause
A) less cocoa to be consumed next year.
B) less cocoa to be consumed this year.
C) less cocoa to be produced next year.
D) less cocoa to be produced this year.
E) none of the above since speculation only affects price.
B
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If there are no profits in competitive equilibrium, why do firms produce? How can they stay in business?
What will be an ideal response?
Polar Water, a company that delivers bottled water, is considering three investment opportunities. The expected returns for each of the projects are as follows: buying a new delivery van, 12%; computer training for its office staff, 9%; and defensive driving training for its drivers, 8%. If the current interest rate is 7%, the firm should invest in
A. only the purchase of a new delivery van. B. the purchase of a new delivery van and computer training for its office staff. C. all of the projects. D. none of the projects.