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Brian is training for a triathlon, a timed race that combines swimming, biking, and running.
Consider the following sentence: Because his pool sessions are helping him swim more quickly, Brian plans to reduce by 1 hour per week the time he spends training on the bike and increase by 1 hour the time he spends in the swimming pool; however, his wife says that he should stop doing any biking and running and spend all 20 hours per week in the pool.
Which basic principle of individual choice does Brian's plan illustrate that his wife's advice does not?
All costs are opportunity costs.
Resources are scarce.
Many decisions are made on the margin.
People usually exploit opportunities to make themselves better off.
Using the value of MPC = 0.8, and knowing the difference between the values of expenditure multiplier and the tax multiplier, it can be safely stated that the reduction of taxes by $400 billion (other things staying the same), Estimate increased leve..
Anti-poverty programs
A price taking firm chooses its inputs to maximize long-run profits. Labor and capital are substitutes in production and both exhibit decreasing returns to scale, q(L, K) = L^(1/2) + K^(1/2) . The output price is 100 and the price of each of the inpu..
The corresponding cash flow diagram for the first two 6-year cycles is shown below. Fill in the missing amplitudes of all cash flows. Then compute the equivalent annual cost (in each cycle) of the maintenance and resurfacing costs (ignore the ini..
Discuss the strategies that a particular company employed to either obtain or sustain a competitive advantage. For example, Microsoft arguably created a competitive advantage by offering a unique suite of products that now reside on many desktops. Th..
q1. confronted with a choice between 50 today or 100 one year from now economic experts suggest that the vast majority
Some personal computer software is sold at special discounts to students. Other software is provided in a less powerful version for students. Why do publishers offer discounts to students? What is the purpose of developing less powerful editions?
A substantial increase in marginal tax rates will most likely encourage individuals to choose: Question 13 options: 1) to work more overtime. 2) to invest more. 3) to spend more of their scarce resources looking for tax shelters. 4) none of the above..
Consider an economy described by the production function: Y=F(K,L)=K ^(.4) L^(.6). What is the per-worker production function? Assuming no population growth or technological progress, find the steady state capital stock per worker, output per worker,..
Recently, the Fed has allowed the money supply to expand beyond its long-term target range. Does this affect your expectation of what the Fed will decide at its upcoming meeting?
q1. referring to the output and substitution effects explain why an increase in the wage rate for autoworkers will
You should recommend that the project be rejected because, although its NPV is positive, its MIRR is less than the WACC, and that indicates that the firm's value will decline if it is accepted.
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