You have two options for how to spend the afternoon. You can either go see a movie with your roommate or work as a tutor for the Math Department. From experience, you know that going to see a movie gives you $20 worth of enjoyment, and with your student discount, a movie ticket only costs $12. If you spend the afternoon working as a math tutor, you will get paid $45. On a typical day, you wouldn't be willing to spend the afternoon working as a math tutor for less than $35. Should you go see a movie or work as a math tutor?
A. You should do neither.
B. Both options are equally good.
C. You should go to the movies.
D. You should work as a math tutor.
Answer: D
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Which of the following makes it more likely that a country will get caught in a vicious circle of debt financing, higher taxes, and sluggish growth?
a. Politicians like to raise taxes, but they are reluctant to spend on education, health care, and roads. b. High levels of debt will eventually lead to higher taxes just to pay the interest on the debt, but high taxes will slow economic growth. c. As outstanding debt increases, politicians will be reluctant to run budget deficits, which will cause the economy to slow. d. As outstanding debt increases, short-sighted politicians will want to run large budget surpluses in order to pay off the national debt quickly.
The long run is defined as:
A. the horizon in which there are both fixed and variable factors of production. B. the horizon in which the manager can adjust all factors of production. C. the horizon in which there are only fixed factors of production. D. greater than one year.
Suppose there are two good types (Type 1 and Type 2) and suppose the weights for the types are 80% for Type 1 and 20% for Type 2. Suppose the Price Index for Type 1 is 125 and the Price Index for Type 2 is 120. The overall price index is
A. is 128. B. is 116. C. is 122.5. D. is 124.
What is the opportunity cost of moving from point D to point C?
