What might be an incentive for you to take a class in summer school? List some of the benefits and costs involved in your decision. Would your choice be rational?
What will be an ideal response?
Early graduation, smaller class sizes, and/or retaining eligibility for a scholarship are examples of incentives that encourage taking summer classes. The benefits of taking summer classes might include early graduation, more personal attention from the instructor, retained eligibility for a scholarship, and increased knowledge about some aspect of the world. Costs potentially include forgone summer jobs or internships, less time to spend with friends, and additional tuition and other class-related expenses if the class I not one that would be taken otherwise. The choice is rational as long as the student determines that taking summer classes offers the highest benefit over cost for the use of his or time and efforts.
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John's utility of wealth curve is shown in the above figure. He currently has wealth of $20,000. If there is a 10 percent chance that he could lose all his wealth, what is his expected wealth?
A) $0 B) $2,000 C) $17,000 D) $18,000
Suppose total cost is $1,000 when output is zero, $1,200 when output is one, and $1,500 when output is two, then which of the following is true?
a. Average total cost is $500 when two units of output are produced. b. Total fixed cost is $1,500. c. The marginal cost of producing the first unit of output is $1,200. d. The marginal cost of producing the second unit of output is $300.