When optimizing in levels, if the ________ exceeds the ________, Project A is chosen over Project B
A) marginal benefits of Project B; marginal benefits of Project A
B) net benefits of Project A; net benefits of Project B
C) total benefits of Project A; total benefits of Project B
D) marginal cost of Project A; marginal costs of Project B
B
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Since last year, the price of gold has risen from $1100 to $1420. What annual inflation rate would leave the real price of gold unchanged over the last twelve months?
A) Approximately 29% B) 40% C) Approximately 71% D) 320% E) none of the above
Which of the following statements demonstrates an understanding of the importance of sunk costs for decision making?
I. "Even though I hate my MBA classes, I can't quit because I've spent so much money on tuition." II. "To break into the market for soap our firm needs to spend $10M on creating an image that is unique to our new product. When deciding whether to develop the new soap, we need to take this marketing cost into account." A) I only B) II only C) Both I and II D) Neither I nor II