Answer
$= -\frac{1}{64}$
Work Step by Step
Recall, because of PEDMAS, we consider what is inside of parenthesis first, and then we consider the exponent. Thus, we obtain:
$(\frac{1}{4}-\frac{1}{2})^{3}$
$= (\frac{1}{4}-\frac{2}{4})^{3}$
$= (-\frac{1}{4})^{3}$
$= -\frac{1}{4^{3}}$
$= -\frac{1}{64}$