How long is it worthwhile to continue searching for a $20 bill that you lost if you value your time at $5 an hour?
A) About 2 hours if there is a fifty percent chance of finding it.
B) About 4 hours, regardless of the probability of finding it.
C) Only so long as you expect to find it within the next four hours, which could mean far more than four hours of searching.
D) You cannot make a rational decision without first knowing whether you will find it.
E) You should not search at all because the lost bill is a sunk cost.
Answer: C) Only so long as you expect to find it within the next four hours, which could mean far more than four hours of searching.
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Refer to the below table for a profit-maximizing firm. The price of the firm's product is $10 per unit and the wage rate is a constant $110 a day. How many workers will the firm hire, assuming purely competitive product and resource markets?
A. 4
B. 5
C. 6
D. 7
A key to motivating people in a business entity is to remember that each person:
A. tends to act in his/her own self-interest. B. tends to be very lazy. C. follows the rules of ethics popularized by their professional societies. D. tends to follow orders unless a strong reason is given to behave otherwise.
Nominal GDP is the market value of ________.
A. all output produced and accumulated over the years B. resources (land, labor, capital, and entrepreneurship) in an economy in a given year C. all consumption and investment spending in an economy in a given year D. all final goods and services produced in an economy in a given year
Describe each of the following as a positive demand shock, a negative demand shock, a positive supply shock, or a negative supply shock, and specify how each are represented on the Phillips curve
a. a sudden increase in oil prices b. a large increase in spending on residential construction c. a sudden decrease in household wealth resulting from a stock market crash d. a substantial increase in productivity following technological advancements