QUESTION 11 Suppose you can save $50 by purchasing your new textbook in a different district and the trip to that district requires only $10 in transportation (i.e. the trip costs you $5 each way). Which of the following statement is true? O A. You will buy the new textbook in that district because the amount saved is larger than the transportation cost. O B. If your value of time is $30 per hour and the trip takes 1 hour each way, you will buy the new textbook in that district. O C. If your value of time is $5 per hour and the trip takes 3 hours each way, you will buy the new textbook in that district. O D. If your value of time is $15 per hour and the trip takes 2 hours each way, you will buy the new textbook in that district. QUESTION 12 Suppose Tina and Mike work in a bakery making pies and cakes. Suppose it takes Tina 1 hour to make a pie and 1 hour to make a cake, and suppose it takes Mike 2 hours to make a pie and 1.5 hours to make a cake. Which of the following statement is correct? O A. Mike has a comparative advantage in pies. O B. Tina should make all the pies and cakes in this bakery. O C. Mike should spend more time making cakes and Tina should spend more time making pies. O D. Tina has a comparative advantage in cakes. QUESTION 13 On the campus of Noonego University, half of the bikes are expensive (replacement value = $1,000), and half are cheap (replacement value = $200). There is a 50% chance that any particular bike - expensive or cheap - will be stolen in the next year. Suppose a firm offers bike-theft insurance for $400 per year: the firm will replace any insured bike that is stolen. Which of the following statement is correct? O A. Half of the insured bikes are expensive and half of the insured bikes are cheap. O B. Only the owners of the expensive bikes will buy insurance from this firm. O C. This firm will make a profit from selling these insurance policies. O D. Only the owners of the cheap bikes will buy insurance from this firm