Figure 18.1Refer to Figure 18.1. The opportunity cost of hang gliders in the United States is:
A. 1/4 of a bicycle.
B. 1/3 of a bicycle.
C. 3 bicycles.
D. 4 bicycles.
Answer: B
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Suppose the nominal interest rate is 15% and the rate of inflation is 3%. The real interest rate is therefore
A) 3%. B) 5%. C) 12%. D) 18%.
The opportunity cost of money is
A) zero. B) the inflation rate. C) the real interest rate. D) the nominal interest rate.
How is consumer surplus changed by the introduction of tariffs on imported shoes as shown in Exhibit 1?
a. loss of areas c, d, e, and f
b. loss of areas d and e
c. gain of area c
d. gain of area e
One reason nonunionized firms do not always drive unionized firms out of business is that:
A. unionized firms hire more selectively, employing workers with greater human capital. B. unionized firms reduce the value of total output. C. markets are not competitive. D. unionized firms receive government subsidies.