Suppose that you purchased a ticket to a jazz festival for $100 from an online ticket broker. Once you arrived at the festival, you discovered that parking costs you an additional $15. In this situation, the additional $15 you pay for parking is an example of
A. an economic loss.
B. marginal cost.
C. an inefficient cost.
D. opportunity cost.
Answer: B
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The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier. B. self-correcting property. C. short-run equilibrium property. D. long-run equilibrium property.
The table above shows the production possibilities for an economy. When the economy produces a combination of 900 books and 50 loaves of bread,
A) production efficiency occurs because resources are not overused. B) allocative efficiency is achieved because both goods are produced. C) production efficiency is not achieved. D) allocative and production efficiency are both achieved. E) production efficiency is not achieved but allocative efficiency might be achieved.
In which of the following instances would the deadweight loss of the tax on airline tickets increase by a factor of 9?
a. The tax on airline tickets increases from $20 per ticket to $60 per ticket. b. The tax on airline tickets increases from $20 per ticket to $90 per ticket. c. The tax on airline tickets increases from $15 per ticket to $60 per ticket. d. The tax on airline tickets increases from $15 per ticket to $135 per ticket.
Suppose planting flowering shrubs creates a positive externality equal to $7 per shrub. Further suppose that the local government offers a $7 per-shrub subsidy to planters. The number of shrubs that are planted is then
a. less than the socially optimal quantity. b. greater than the socially optimal quantity. c. equal to the socially optimal quantity. d. There is not enough information to answer the question.