Optimization in differences analyzes:
A) the total net benefits of the alternative that looks the most attractive.
B) the change in the net benefits resulting from a shift from one alternative to another.
C) only the costs of an alternative and not the benefits.
D) the total net benefits of different alternatives.
B
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In a certain economy, the components of aggregate spending are given by: C = 500 + 0.75(Y - T) - 500rI = 300 - 500rG = 400NX = 30T = 40 Given the information about the economy above, which expression below gives autonomous expenditures?
A. [1,230 - 1,000r] B. [1,200 - 1,000r] C. [1,200 - 1,000r] + 0.75Y D. [1,270 - 1,000r] + 0.75Y
The sale of financial assets, such as stocks and bonds, is ________.
A. not included in GDP, because they do not increase domestic production B. not included in GDP, because they do not increase domestic wealth C. included in GDP, because they increase domestic wealth D. included in GDP, because they raise domestic production
In a planned economy the concept of efficiency is
a. more important than in a market economy. b. less important than in a market economy. c. not important at all. d. as important as in a market economy.
A person with AIDS has a guaranteed right to apply for health insurance and receive coverage at the same rate as a healthy person. What is the likely result for the insurance company?
a. Rational ignorance b. The principle-agent problem c. The substitution effect d. Externalities e. Adverse selection