In an attempt to boost enrollment, in January 1996, a private college in Iowa offered free tuition for seniors graduating from high school in the county where it is located. For students who accept the offer, how does this offer affect the opportunity cost of attending college?
a. The opportunity cost is not changed, since lost earnings are still a factor. Incorrect. Please review Top Ten Concept # 1.
b. The opportunity cost is now zero for the typical student.
c. The opportunity cost is very low, because the only cost is for books and school supplies.
d. The opportunity cost is not changed, since tuition is not a factor in computing opportunity cost.
e. The opportunity cost is lower than if tuition were charged, but there is still a cost.
d. The opportunity cost is not changed, since tuition is not a factor in computing opportunity cost.
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Arnold Harberger was the first economist to estimate the loss of economic efficiency due to market power. Since Harberger's findings were published, other researchers have studied this same issue. How do the results of these researchers compare to Harberger's results?
A) The other researchers reached conclusions similar to Harberger's; namely, the loss of economic efficiency due to market power is about 1 percent of the value of production in the United States. B) The other researchers reached conclusions different from Harberger's; namely, they found that the loss of economic efficiency due to market power is only about 1 percent of the value of production in the United States, much less than Harberger's estimate. C) The other researchers reached conclusions different from Harberger's; namely, the loss of economic efficiency due to market power is about 10 percent of the value of production in the United States, significantly greater than Harberger's estimate. D) The other researchers reached conclusions similar to Harberger's; namely, the loss of economic efficiency due to market power is about 10 percent of the value of production in the United States.
If workers sit idly by for a portion of their workday, but are still employed, ________
A) the negative productivity shock has no effect on output B) it is unlikely that a decrease in aggregate demand is the cause C) aggregate data may create a false illusion of a negative productivity shock D) a negative productivity shock is the most plausible explanation
Which type of unemployment leads to a natural rate of unemployment above zero?
A. The natural rate of unemployment is always zero. B. Frictional unemployment C. Unemployment of government workers D. Cyclical unemployment
The state is considering adding a satellite campus to its major university. How can marginal analysis assist, even though the university does not attempt to maximize profits?