A straight-line demand curve has an elasticity that becomes smaller as we move from left to right along the schedule.

Refer to Figure 4-1. What is the total amount that Kendra is willing to pay for 3 ice cream cones?

A) $2.50 B) $7.50 C) $9.00 D) $13.50

A firm’s net investment will be negative if

a) the actual capital stock is less than the optimal capital stock b) the rate of return on capital exceeds the market interest rate c) the depreciation rate is less than the gross investment rate d) gross investment is zero e) its workforce is growing faster than its capital stock