Question
The Custom Halloween Company purchases a new sewing machine to replace an older machine with limited capabilities. The first week the new machine is used production nearly doubles. Which economic principle does this illustrate?
The impact of capital investments
The law of demand
The law of supply
The risk of an investment vehicle
The impact of capital investments
The law of demand
The law of supply
The risk of an investment vehicle
Answers
GPT-4o mini
The situation described illustrates **the impact of capital investments**. The purchase of the new sewing machine, which leads to a significant increase in production capacity, reflects how investing in better capital can enhance productivity and efficiency in a business.