President Barack Obama pushed forward a national health care plan to increase the availability of medical care for all Americans. How would one determine the opportunity cost of the proposal?
What will be an ideal response?
Every decision by government has an opportunity cost, as would any decision made by consumers or businesses. One would have to determine the best forgone alternative, be it national defense, a space station, the Superconducting Super Collider, the environment, or a tax cut. Each of these has a “value,” even if it is hard to put a price tag on it. Clearly, determining the opportunity cost of such a complex decision is not easy in practice.
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Along a given demand curve, a decrease in supply will typically
a. decrease price, but the change in quantity could be in either direction b. increase price and decrease the quantity c. decrease price but leave quantity unchanged d. decrease both quantity and price e. increase both quantity and price
Which of the following contributed to a slowdown in U.S. labor productivity during the 1970s?
a. An increase in the number of skilled legal immigrant workers b. An increase in the illegal employment of minors c. An increase in the number of skilled illegal immigrant workers d. The exit of the baby boom generation from the work force e. Lower energy prices
Suppose the economy goes from a point on its production possibilities frontier (PPF) to a point below that PPF. Assuming that the PPF has not shifted, this could be due to
A) a gain of resources. B) a loss of resources. C) technological improvement in the production of both goods. D) a new law that interferes with economic efficiency.
Suppose the United States decides to impose a $1,000 tax on every Japanese minivan sold in the United States. This is an example of:
A. a tariff. B. free trade. C. comparative advantage. D. a quota.