If Project A has a cost of $2, and provides a benefit of $3, and Project B has a cost of $ 5 and provides a benefit of $8, which of the following statements is true?
A) The net benefit of Project A is $5.
B) An individual can optimize by choosing Project B.
C) Project A has a higher net benefit than Project B.
D) A shift from Project A to Project B increases the net benefit by $1.
B
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The production possibilities frontier model assumes all of the following except
A) the level of technology is fixed and unchanging. B) any level of the two products that the economy produces is currently possible. C) labor, capital, land and natural resources are fixed in quantity. D) the economy produces only two products.
An income effect
A. is measured as the change in prices over time. B. is not possible when people are unemployed. C. requires interest rates to remain constant. D. is the change in the quantity demand due to the fact that real income changes when prices change.
According to the traditional economic model, which of the following would alter a state of consumer equilibrium if all other factors remain the same?
a. a decrease in the price of a good b. an increase in the quantity supplied of a good c. a decrease in the number of substitutes d. an increase in the number of complements
Given a set amount of money, goods A and B both give the same marginal utility at current levels of consumption but good A costs twice as much as good B. You should:
A. realize that you don't have enough information to answer the question. B. consume more of good B and less of good A. C. consume more of good A and less of good B. D. keep consuming the current amounts of both good A and good B.