Claire is on her way to her job at a call center where she was planning on spending three hours. She can drop in and work any hour she wants to and earn $12 per hour. Her friend calls and invites her to spend the next three hours bungee jumping. Claire decides to go with her friend, which tells us Claire's opportunity cost of working for three hours is:

Two individuals are playing a trust game that has three rounds. In the first two rounds of the game, they have accumulated $1,000 as a team

In the third round, Player 1 is blindfolded and asked to decide whether he would let Player 2 guide him to a particular destination or opt out of the game. If he lets Player 2 guide him, Player 2 can either guide him to the correct destination or take him elsewhere. If he leads him to the correct destination, each of them will get half the accumulated money. On the other hand, if Player 2 can lead him astray, Player 2 will get 75% of the accumulated money and Player 1 will get 25%. If Player 1 opts out of the game, he will get 30% of the accumulated money and Player 2 will get 20%. a) What is the equilibrium outcome in this case? b) How will the equilibrium change if the players can impose a guilt penalty of 60% of the accumulated money on the defecting player?

Assume the economy is in short-run equilibrium at a real GDP above its potential real GDP. According to classical theory, which of the following policies should be followed? a. The Federal Reserve should use open market operations and buy U.S. government securities. b. The Federal Reserve should not follow a fixed rule

c. The federal government should cut taxes. d. Fiscal policy and monetary policy should not be activist.