A Firm Will Invest in a Project If

question 132

Multiple Choice

A firm will invest in a project if

• A) the interest rate exceeds the opportunity cost of the project.
• B) the firm's level of capital is at the desired level.
• C) the firm's level of capital is higher than the desired level.
• D) the rate of return of the project is greater than the opportunity cost of the investment.

---

Definitions:

Social Facilitation Hypothesis

A theory suggesting that the presence of others can improve one's performance on tasks, especially those that are simple or well-learned.

Door-In-The-Face Effect

A compliance technique where a larger, unreasonable request is made first, followed by a smaller, more reasonable request that is the actual goal.

Conformity Hypothesis

A theory suggesting that individuals adjust their attitudes, beliefs, or behaviors to align with the norms of a group, often in response to real or imagined group pressure.

Coaction Effect

The phenomenon that individuals perform tasks better or work harder in the presence of others doing the same task.