When a Firm Builds a New Factory, This Is an Example

question 94

Multiple Choice

When a firm builds a new factory, this is an example of an investment in:

• A)human capital.
• B)physical capital.
• C)the market.
• D)research and development.

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Definitions:

Elastic

A characteristic of supply or demand that indicates a high sensitivity to changes in price.

Inelastic

Describes a situation where a change in price leads to a relatively small change in the quantity demanded or supplied.

Market Efficiency

A scenario where all existing information is entirely accounted for in the prices of assets, rendering it impossible to consistently outperform the market average in terms of returns.

Government

An organized system that establishes rules and regulations, governs, and provides services to its constituents.