According to economic theory what is the optimal percentage of ...

[mwit1967]

According to economic theory what is the optimal percentage of GDP to be spent on medical care?
 a. 6 percent.
  b. 8 percent.
  c. 10 percent.
  d. 12 percent.
  e. There is no widely-accepted way to determine the optimal percentage.

Question 2

The more a firm invests in a new production technology, the lower its marginal costs. Which of the following scenarios involving this incumbent firm and a potential entrant makes the least economic sense?
 a. The incumbent overinvests to deter entry when this investment is observable to the entrant.
  b. The incumbent overinvests to deter entry when this investment is unobservable to the entrant.
  c. The incumbent underinvests to accommodate entry when this investment is observable and they compete in prices.
  d. The incumbent overinvests to accommodate entry when this investment is observable and they compete in quantities.

[katara]

Answer to Question 1

E

Answer to Question 2

b

[mwit1967]

YES! Correct, THANKS for helping me on my review

[connor417]

Thanks for the timely response, appreciate it