Jimmy is very excited about the costume party with a 1990s theme. He is planning to dress up as MC Hammer but is also considering going as a lifeguard from Baywatch. His opportunity cost of arriving dressed like MC Hammer is:
A. the savings from not purchasing red swimming trunks.
B. giving up the alternative of dressing like a lifeguard.
C. the cost of parachute pants that MC Hammer would wear.
D. there is no opportunity cost because he attended the party either way.
Answer: B
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Refer to Table 2-8. What is Betty's opportunity cost of making a statue?
A) 2 benches B) 1.4 statues C) 1/2 of a bench D) 1/3 of a bench
In the figure, AD 1 and AS 1 represent the original aggregate supply and demand curves and AD 2 and AS 2 show the new aggregate demand and supply curves. The changes in aggregate demand and supply in the diagram produce:
A. a higher price level.
B. an expansion of real output and a stable price level.
C. an expansion of real output and a higher price level.
D. a decline in real output and a stable price level.
Supporters of minimum-wage legislation argue that:
A. a worker earning minimum wage should be able to live above the poverty line. B. it would not be fair for firms to pay a wage that would leave workers struggling to escape poverty. C. workers deserve a basic standard of living. D. All of these are true.
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.