The following accompanying table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation), and only the CPU speeds listed below are available for purchase. CPU GHzTotal BenefitMarginal BenefitTotal CostMarginal Costs2.0$1,000 $900 2.5$1,400 $1003.0 $300$1,200 3.5$1,900 $1,500 4.0$2,000 $400The marginal cost of upgrading from a 2.5GHz to 3.0GHz computer is:
A. $300.
B. $100.
C. $400.
D. $200.
Answer: D
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Refer to Table 2-5. Assume Nadia's Neckties only produces ascots and bowties. Nadia faces ________ opportunity costs in the production of ascots and bowties
A) constant B) increasing C) decreasing D) negative
If the opportunity cost of capital is below the rate of return to capital in the perfectly competitive beauty salon industry,
a. resources will flow into the industry. b. beauty salon owners must be earning negative economic profit. c. the beauty salon industry cannot be in long-run equilibrium. d. beauty salon owners must be earning negative marginal revenue at their current levels of output.
When interest rates fall
a. firms want to borrow more for new plants and equipment and households want to borrow more for homebuilding.
b. firms want to borrow more for new plants and equipment and households want to borrow less for homebuilding.
c. firms want to borrow less for new plants and equipment and households want to borrow more for homebuilding.
d. firms want to borrow less for new plants and equipment and households want to borrow less for homebuilding.
In the Nash equilibrium of a prisoner's dilemma:
A. there is unrealized opportunity for both to gain. B. total economic surplus is maximized. C. both players have equal payoffs. D. there is no cash left on the table.