If Christina goes surfing for two hours instead of earning $20 per hour for those two hours, her opportunity cost is
A. the good time spent surfing.
B. $40.
C. the travel time to the beach.
D. the minimum wage that some other people would earn.
Answer: B
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A correct formula (dropping all minus signs) for the calculation of the elasticity of demand between point Q1, P1 and point Q2, P2 is
A. [(P2? P1)/(P2 + P1)]/[(Q2? Q1)/(Q2 + Q1)]. B. [(P2? P1)/P1]/[(Q2? Q1)/Q1]. C. [(Q2? Q1)/(Q2 + Q1)]/[(P2? P1)/(P2 + P1)]. D. [(Q2? Q1)/Q2)]/[(P2? P1)/P2].
Suppose a price ceiling is set by the government below the market equilibrium price. Which of the following will result?
a. The demand curve will shift to the left. b. The quantity demanded will exceed the quantity supplied. c. The quantity supplied will exceed the quantity demanded. d. There will be a surplus.
Which of the following would be most likely to increase the demand for money?
a. An increase in the price level b. A decrease in real income c. An increase in the interest rate d. A decrease in the cost of converting other assets into money e. A decrease in the price level
The sharp reduction in marginal tax rates during the 1980s
a. reduced the incentive of high-income Americans to work. b. increased the incentive of high-income Americans to utilize tax shelters. c. increased the unemployment rate of high-income Americans. d. increased the visible income of high-income Americans.