When an Investment Project Generates Output That Is Valued More

question 36

Multiple Choice

When an investment project generates output that is valued more highly than the value of the resources required for its production,

• A) undertaking the project will create wealth.
• B) it will generally be profitable to undertake the project if property rights are securely defined and enforced .
• C) entrepreneurs seeking profit will have little incentive to undertake such projects.
• D) both a and b are correct.

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Definitions:

Price

The cost in currency anticipated, called for, or dispensed in payment for a thing.

Quantity Supplied

The amount of a good that producers are willing and able to sell at a given price over a certain period of time.

Company Profits

The financial gain that a company achieves after all expenses, taxes, and costs have been subtracted from total revenue.

Time-Series Graph

A two-variable graph that has dates on the horizontal axis and values of a variable that occurred on those dates on the vertical axis.