Consider the following information regarding a person’s decision to go to college: college tuition is $20,000 per year, room and board is $10,000 per year, and books and materials are $2,000 per year. Suppose that instead of going to college this person could have earned $18,000 working in a store. An economist would calculate the cost of going to college as
A. $20,000.
B. $30,000.
C. $32,000.
D. $50,000.
E. $18,000.
Answer: D
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The marketplace allocates resources
a. fairly. b. efficiently. c. to those desiring them least. d. both efficiently and equitably.
Equity is the condition in which the economy is producing what people want at the least possible cost.
Answer the following statement true (T) or false (F)
The current account surplus is
A) an increasing function of disposable income and an increasing function of the real exchange rate. B) a decreasing function of disposable income and a decreasing function of the real exchange rate. C) a decreasing function of disposable income and an increasing function of the real exchange rate. D) only a decreasing function of disposable income. E) only an increasing function of the real exchange rate.
If all the countries used one common currency, we could expect that exports and imports would
a. decrease because international trade would be less needed b. decrease because each country would be producing more output c. increase because exchange rate uncertainty would be eliminated d. increase because many small countries would benefit most e. not change because trading of goods is independent of currency