An innovation cycle could be caused by
a. a decreasing capital stock
b. a sharp increase in national income
c. a climatic change
d. a sharp increase in the pace of technological change
e. a decrease in the demand for housing
D
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Which of the following is NOT an important factor affecting economic growth?
A) the rate of growth of capital B) the rate of saving C) the rate of growth in labor productivity D) the growth of leisure
Wendy has to decide between taking a flight and driving to California. Air tickets cost $800 and will get her to California in 2 hours. If she decides to drive, she would need $300 worth of gasoline and 10 hours to reach her destination
Suppose that Wendy's opportunity cost of time is $20 per hour. Assuming that there are no other costs involved, use cost-benefit analysis to decide whether she should fly or drive to California. If Wendy has an important business meeting to attend and this increases her opportunity cost of time to $200 per hour, will her optimum decision change? Explain.