Which of the following is an example of opportunity cost?
a. The Chinese food that you give up when you choose to eat Italian food.
b. The tuition that you pay to attend college.
c. For a professor of economics, the pleasure that he or she derives from teaching economics.
d. Sweets given up by a person who would never eat them even if he or she could.
e. The price paid for a ticket when you go for a movie.
a
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Government intervention can increase total welfare when
A) there are costs or benefits that are external to the market. B) consumers do not have perfect information about product quality. C) a high price makes the product unaffordable for most consumers. D) all of the above E) A and B only
Total government spending in the U.S. economy was around _____ of the GDP in the financial year 2010
a. 5 percent b. 36 percent c. 25 percent d. 44 percent e. 16 percent
Because of the automatic stabilizers, a decline in the level of economic activity will cause:
A. a reduction in tax revenues collected. B. a reduction in government expenditures. C. a greater budget surplus. D. Congress to vote for a tax cut.
Exhibit 16-1 Money market demand and supply curves
Starting from an equilibrium at E1 in Exhibit 16-1, a leftward shift of the money supply curve from MS1 to MS2 would cause an excess:
A. demand for money, leading people to sell bonds. B. demand for money, leading people to buy bonds. C. supply of money, leading people to sell bonds. D. supply of money, leading people to buy bonds.