One example of thinking at the margin is:
a) determining whether it is better to spend your savings on a new CD player or on a television
b) deciding whether the benefit of working two extra hours per day is worth the sacrifice of study time
c) putting all your money in a savings account because the interest rates are so high
d) deciding to buy a car you don't really like because it is significantly less expensive than the one you want
Answer: b) deciding whether the benefit of working two extra hours per day is worth the sacrifice of study time
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When interest rates in the U.S. decrease, we can expect NCO to:
A. increase, because capital inflow is decreasing. B. increase, because capital inflow is increasing. C. decrease, because capital inflow is increasing. D. decrease, because capital inflow is decreasing.
Gamma has $30,000 of capital per worker, while Omega has $7,500 of capital per worker. In all other respects, the two countries are the same. According to the principle of diminishing returns to capital, an additional unit of capital will increase output ________ in Gamma compared to Omega, holding other factors constant.
A. less B. more C. by the same amount D. not at all