Refer to Scenario 4 . What is the opportunity cost of building one more prison?
What will be an ideal response?
The opportunity cost of building one more prison is two schools. This is gleaned from the fact that the opportunity cost of 5 prisons is 10 schools or 5P = 10S. Solving for P leaves you with 2S or two schools
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If real GDP for 2009 is $6400 billion and nominal GDP for 2010 is $6720 billion (in 2010 dollars), then the growth rate of real GDP is
A) 0%. B) 0.5%. C) 5%. D) unknown based on the given information.
When the cost of borrowing funds which is stated on a loan is adjusted for the effects of inflation, the resulting interest rate is called the
A) prime interest rate. B) nominal interest rate. C) real interest rate. D) core PCE interest rate.
An analysis of the incidence of a unit tax on suppliers versus a unit tax on demanders shows us that the _____ of a tax may be different from the _____ of a tax
a. actual burden; distribution b. payment; distribution c. amount; incidence d. actual burden; legal assignment
"An increase in the federal minimum wage causes an increase in unemployment among teenagers" is a:
a. statement of positive economics. b. statement of normative economics. c. testable value judgment. d. fallacy of composition.