Assume That in Jabara, Planned Investment Is $30 Billion, but Actual

question 8

Multiple Choice

Assume that in Jabara, planned investment is $30 billion, but actual investment is $45 billion. Unplanned inventory investment is

• A) -$75 billion.
• B) -$15 billion.
• C) $15 billion.
• D) $75 billion.

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Definitions:

Law of Diminishing Returns

The principle that adding more of one factor of production, while keeping others constant, will eventually yield lower per-unit returns.

Economic Profit

The surplus remaining after deducting both explicit and implicit costs from total revenues, emphasizing a firm's financial performance beyond just its accounting profit.

Accounting Profit

Accounting profit is the monetary gain calculated by subtracting total explicit costs from total revenue.

Sunk Cost

A cost that has already been incurred and cannot be recovered, and therefore should not affect current and future business decisions.