Hans can do 4 loads of laundry per hour, and he can type 6 pages per hour. Maria can do 12 loads of laundry per hour, and she can type 8 pages per hour. Maria’s opportunity cost of doing one load of laundry is:
A. 4 pages.
B. 6 pages.
C. 2/3 of a page.
D. 3/2 of a page.
E. impossible to compute without additional information.
Answer: C. 2/3 of a page.
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In the country of Bora Bora, consumers buy large quantities of alcohol, tobacco, and coffee. Last year, the prices of these goods each increased by 10 percent. The quantities demanded for these goods fell by 10, 3, and 8 percent, respectively. If the government is thinking about imposing a unit tax on one of these goods, which good should they choose to tax to raise the most tax revenue, and why?
a. Alcohol; because the price elasticity is highest. b. Tobacco; because the price elasticity is lowest. c. Coffee; because it will have the lowest tax elasticity. d. Tobacco; because it will have the highest tax elasticity. e. Alcohol; because the burden of taxation would be more even.
The consumer price index was 200 in 2008 and 190 in 2009 . The nominal interest rate during this period was 4.5 percent. What was the real interest rate during this period?
a. - 0.75 percent b. - 0.5 percent c. 9.5 percent d. 9.75 percent
With an upward-sloping AS curve, a decrease in transfer payments can lead to a decrease in inflation.
Answer the following statement true (T) or false (F)
A key assumption of public choice economics is that government officials are:
A. not rational. B. rational and respond to incentives. C. trying to do only what is best for society. D. not influenced by incentives.