The following table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation), and only the CPU speeds listed below are available for purchase.CPUGHzTotal BenefitMarginal BenefitTotal CostsMarginal Costs2.0$1,000 $900 2.5$1,400 &1003.0 $300$1,200 3.5$1,900 &1,500 4.0$2,000 &400The total benefit of a 3.0GHz computer is:
A. $900.
B. $300.
C. $1,700.
D. $1,650.
Answer: C
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When an economy operates at its long-run potential output level,
a. aggregate demand will exceed aggregate supply in the goods and services market. b. unemployment will decline to an abnormally low rate that cannot be sustained in the long run. c. the actual rate of unemployment will exceed the natural rate of unemployment. d. the natural and actual rates of unemployment will be equal.
Suppose Country A, a labor-abundant country, produces only wheat and cloth. The following equations illustrate the prices and costs of wheat and cloth in the country. The numbers indicate the amounts of labor and land needed to produce a unit of wheat and cloth. 'W' is the wage rate and 'r' is the rental rate of land.Price of wheat = 1w + 2rPrice of cloth = 2w + 1rSuppose Country A engages in free trade and the price of cloth increases to $4 per unit. However, the price of wheat remains unchanged. Under such a situation, the Stolper-Samuelson theorem will predict that
A. the purchasing power of both the landowners and the laborers will increase. B. the purchasing power of the laborers will increase but that of the landowners will decline. C. the real income of both the landowners and the laborers will decline. D. the real income of the landowners will increase but that of the laborers will remain unchanged.
Inside lags are:
A. longer for monetary policy than for fiscal policy. B. longer for fiscal policy than for monetary policy. C. the same for fiscal policy and monetary policy. D. more variable for monetary policy than for fiscal policy.
Increasing foreign trade has reduced income inequality because the market expansion effect increases the work opportunities and wages of low-skilled workers.
Answer the following statement true (T) or false (F)