A student was heard to remark, "Even though I am certain to fail this course, I cannot withdraw from it since it is too late to get back my tuition." Use one or more "Ideas for Beyond the Final Exam" to analyze this reasoning
The student is failing to use marginal analysis. Tuition is paid and gone whether or not she withdraws from the course. If getting an F requires retaking the course, it will still be necessary to pay tuition again. One could also note that the student is disregarding an important component of opportunity cost. An F on a transcript is more detrimental than a W.
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In the new classical model, workers and firms try to keep their real wages and relative prices from falling when ________
A) income falls B) they expect inflation to rise C) they expect inflation to fall D) they expect aggregate demand to fall
The goal of internal balance includes
A. a reasonable and sustainable balance of payments with the rest of the world. B. low interest rates. C. full employment of resources. D. exchange rate stability.