Larry was accepted at three different graduate schools, and must choose one. Elite U costs $50,000 per year and did not offer Larry any financial aid. Larry values attending Elite U at $60,000 per year. State College costs $30,000 per year, and offered Larry an annual $10,000 scholarship. Larry values attending State College at $40,000 per year. NoName U costs $20,000 per year, and offered Larry a full $20,000 annual scholarship. Larry values attending NoName at $15,000 per year. Larry maximizes his economic surplus by attending:
A. NoName U because the annual cost is only $20,000.
B. NoName U because he has a full scholarship there.
C. State College.
D. Elite U.
Answer: C
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If some industries exhibit internal increasing returns to scale in each country, we should not expect to see
A) perfect competition in these industries. B) intra-industry trade between countries. C) inter-industry trade between countries. D) high levels of specialization in both countries. E) increased productivity in both countries.
Use the neoclassical theory of investment to explain why technological progress that reduces the price of computers (and related information technology) impacts investment differently than technological progress that makes computers more productive
What will be an ideal response?