Choosing to study for an exam until the extra benefit (e.g., improved score) equals the extra cost (e.g., the value of foregone activities) is:
A. an application of the Cost-Benefit Principle.
B. not rational because it ignores the importance of total benefits and total costs.
C. not an economic choice.
D. an application of the Scarcity Principle.
Answer: A
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Which of the following is not a component of gross investment?
A. Construction of a suburban housing project. B. The purchase of a new drill press by the Ajax Manufacturing Company. C. The piling up of inventories on a grocer's shelf. D. The purchase of 100 shares of AT&T by a retired business executive.
Refer to Scenario 3.1. If the price of potato chips is $0.50 and the price of Cola is $4.00, and Andy has an unlimited income, how many units of potato chips will he consume?
A) 5 B) 6 C) 7 D) 8 E) none of the above
The U.S. government
A. intervenes to prevent the monopolization of any market. B. forbids the creation of legal impediments to entry into any market. C. intervenes to prevent the monopolization of some markets and actively encourages the monopolization of others. D. encourages the permanent monopolization of all markets in which the monopolist has technical superiority over potential competitors.
Exhibit 15-2 Balance Sheet of Springfield National Bank Assets Liabilities Total reserves$500 Demand deposits$1,000 Loans$500 In Exhibit 15-2, if Springfield National's customers write checks for $200 and the required reserve ratio is 20 percent, then its required reserves fall to:
A. $0. B. $40. C. $160. D. $460.