If Technological Change Increases the Profitability of New Investments for Firms,then

question 104

Multiple Choice

If technological change increases the profitability of new investments for firms,then the ________ curve for loanable funds will shift to the ________.

• A)supply; right
• B)supply; left
• C)demand; right
• D)demand; left

Understand the concept of Pareto efficiency and how externalities impact market efficiency.

Recognize the role of authorities and regulatory bodies in mitigating negative externalities to improve welfare.

Identify and analyze the externalities in various market situations, including common resources and public goods.

Understand the importance of property rights and how their allocation affects market outcomes and distribution.

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Definitions:

Price-Earnings Ratio

A valuation metric for a stock, calculated by dividing the current market price of the stock by its earnings per share.

Incremental Value

The additional or extra value generated by making a specific business decision, considered when evaluating multiple options.

Earnings per Share

A financial ratio indicating the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company’s profitability.

Merger Premium

The additional cost or amount by which a company's purchase price exceeds the pre-merger valuation of the target company.