A student was heard to remark, “Even though I am certain to fail this course, I cannot withdraw from it since it is too late to get back my tuition.” Use one or more “Ideas for Beyond the Final Exam” to analyze this reasoning.
What will be an ideal response?
The student is failing to use marginal analysis. Tuition is paid and gone whether or not she withdraws from the course. If getting an F requires retaking the course, it will still be necessary to pay tuition again. One could also note that the student is disregarding an important component of opportunity cost. An F on a transcript is more detrimental than a W.
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Advances in statistical software is an example of:
A) skill-biased technological changes. B) labor-saving technological changes. C) unskilled-biased technological changes. D) labor-complementary technological changes.
Both an NBA basketball player and a fast-food cook are going to graduate school. Who has a higher opportunity cost? Explain
What will be an ideal response?
The absolute price elasticity of demand for a product for which annual expenditures make up a very small share of a typical consumer's budget is probably
A) less than 1. B) equal to 1. C) greater than 1. D) infinity.
A move from E to F represents
A. a change in quantity demanded.
B. a change in demand.
C. an increase in demand.
D. a decrease in demand.