Suppose the first hour of study today will allow you to answer 10 correct questions on tomorrow's exam. After the first hour, the marginal benefit of each additional hour of study is reduced by 2 (meaning if you study for 2 hours today your total number of correct response tomorrow will be 18 and if you study 3 hours it will be 24 and so on). If the cost of studying each additional hour is zero, how many hours should you study?
a. 18
b. 10
c. 6
d. 0
e. none of the above
Ans: c. 6
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In the two-period model with asymmetric information, a one-unit increase in the real rate of interest on bank deposits
A) causes the real loan interest rate to increase by more than one unit. B) causes the real loan interest rate to increase by less than one unit. C) cause the real loan interest rate to decrease by less than one unit. D) causes the real loan interest rate to decrease by more than one unit.
Refer to Table 3.1 to answer the following questionTable 3.1 Individual Demand and Supply SchedulesQuantity Demanded byPriceAlejandroBenCarlMarket$8.00842________6.001244________4.002046________2.002246________Quantity Supplied byPriceAveryBrandonCassandra $8.006046________$6.004244________$4.002442________$2.00640________In Table 3.1, if the price is $8, the market will
A. Experience a surplus of 56 units. B. Experience a surplus of 30 units. C. Experience a shortage of 22 units. D. Be in equilibrium.
If we were to compare the hourly earnings of union and nonunion workers in recent years, we would find that
A) unions have not succeeded in raising the hourly incomes of their members above nonunion members. B) unions have succeeded in raising the hourly incomes of their members above nonunion members. C) state government unionized employees have earned less in hourly wages than nonunion government employee. D) union members have increased their hourly incomes, but are still below the hourly incomes of nonunion members.
What happens to the demand for Xbox games if the price of an Xbox falls?
A) The demand for Xboxes decreases because the price of a substitute falls. B) The demand for Xboxes increases because the price of a complement falls. C) The demand for Xboxes decreases because the price of a complement falls. D) The demand for Xboxes remains unchanged.