A Firm Can Profitably Introduce a New Activity If and Only

question 27

Multiple Choice

A firm can profitably introduce a new activity if and only if:

• A) the activity's direct benefit exceeds its opportunity cost.
• B)the activity's direct benefit equals its opportunity cost.
• C) all the constraints become nonbinding.
• D) the slope of the resource constraint equals the slope of the objective function.
• E) the shadow price of any one of the resources becomes zero.

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Definitions:

Nuclear Weapons

Explosive devices that derive their destructive force from nuclear reactions, either fission or a combination of fission and fusion.

Saddam Hussein

The fifth President of Iraq, serving from 1979 to 2003, known for his authoritarian rule, involvement in regional wars, and the impact on his country’s economy and human rights record.

Iraq War

A conflict that began in 2003 with the invasion of Iraq by a coalition led by the United States, aimed at toppling Saddam Hussein's regime.

Paralysis of Credit Markets

Paralysis of credit markets refers to a situation where lending comes to a near halt due to extreme uncertainty or financial crisis, leading to economic slowdown.