Problem
Because the future is inherently uncertain, firms often follow "rules of thumb" to make decisions such as how much capital (factories and machinery for production) to buy and how to price their products. Examples are financial ratios and mark-up pricing.
a. Does this behavior make sense?
b. How does uncertainty that firms face encourage firms to use "rules of thumb"?
c. What implications for economic analysis do firms' use of rules of thumb have? (Post-Keynesian)
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.