A singer would willingly perform in a concert for $500,000. If she is paid $200,000 for the concert, she is
A. certainly being paid more than warranted by the level of demand.
B. receiving $300,000 of economic rent.
C. receiving $300,000 to cover her opportunity cost.
D. not being paid her full opportunity cost.
Answer: B
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Suppose an economy has a balanced federal budget, and a favorable supply shock hits the economy. Tax revenues will ________ and expenditures on transfer payments will ________, resulting in a budget ________
A) fall; fall; deficit B) increase; fall; surplus C) fall; increase; deficit D) increase; increase; surplus
Distinguish between the short run and the long run
What will be an ideal response?
If the expected path of 1-year interest rates over the next five years is 2 percent, 4 percent, 1 percent, 4 percent, and 3 percent, the expectations theory predicts that the bond with the lowest interest rate today is the one with a maturity of
A) one year. B) two years. C) three years. D) four years.
The concept quality-adjusted life year (QALY):
a. is given an arbitrary value when applied to a real world problem. b. is a multidisciplinary approach to measuring health status. c. is used extensively to evaluate medical care resource allocation within government-run programs on fixed budgets, especially in Europe. d. is used extensively in the US to evaluate health care programs. e. has little application to medical decision making.