Larry was accepted at three different graduate schools, and must choose one. Elite U costs $50,000 per year and did not offer Larry any financial aid. Larry values attending Elite U at $60,000 per year. State College costs $30,000 per year, and offered Larry an annual $10,000 scholarship. Larry values attending State College at $40,000 per year. NoName U costs $20,000 per year, and offered Larry a full $20,000 annual scholarship. Larry values attending NoName at $15,000 per year. Larry's opportunity cost of attending Elite U is:
A. $20,000
B. $50,000
C. $70,000
D. $15,000
Answer: C
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When Scuba, Inc., lowered the price of a tank of compressed air by 20 percent, it sold 10 percent more tankfuls. The price elasticity for compressed air is
A. 2 B. 1/2. C. 1 D. 20
Which of the following is NOT a characteristic of a perfectly competitive industry?
A) There are many firms. B) There are no restrictions on entry into the market. C) Each firm produces a slightly differentiated product. D) Each firm takes price as given, determined by the equilibrium of industry supply and industry demand.
For the United States, Lorenz curves show that
A) income is more equally distributed than wealth. B) income is less equally distributed than wealth. C) incomes have increased over time. D) blacks and Hispanics became better off in the 1990s.
The immediate effects of a discretionary increase in government spending are represented by a: a. rightward shift of the aggregate demand curve. b. leftward shift of the aggregate demand curve. c. rightward shift of the Phillips curve
d. leftward shift of the Phillips curve. e. movement along the Phillips curve.