Suppose that adding a new disc drive to your computer increases its value by $100. The disc drive costs $75 and takes you 2 hours to install. If you value your time at $6 per hour then the net benefit of installing the disc drive is:
A. $13.
B. $19.
C. $25.
D. $88.
A. $13.
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Why is it inefficient for an economy to be inside the production possibilities frontier?
What will be an ideal response?
Which of the following statements identifies a difference between optimization in levels and optimization in differences?
A) Optimization in levels compares only the costs of different alternatives, whereas optimization in differences compares only the benefits of different alternatives. B) Optimization in levels compares only the benefits from different alternatives, whereas optimization in differences compares only the costs of different alternatives. C) Optimization in levels calculates the net benefits of different alternatives, whereas optimization in differences calculates the change in net benefits when switching from one alternative to another. D) Optimization in levels calculates the change in net benefits when switching from one alternative to another, whereas optimization in differences calculates the net benefits of different alternatives.
If the Federal Reserve conducts open market sales, the money supply ________, shifting the LM curve to the ________, everything else held constant
A) decreases; right B) decreases; left C) increases; right D) increases; left
Which of the following changes in the price index produces the greatest rate of inflation: 12 to 15, 20 to 24, or 30 to 35?
a. 12 to 15 b. 20 to 24 c. 30 to 35 d. All of these changes produce the same rate of inflation.