Some college students think that because a college degree greatly increases their earning potential there is no opportunity cost of attending college. How would an economist look at the matter?
a. There is no opportunity cost, assuming that future earnings actually increase as expected.
b. The opportunity cost is much less than it would appear, assuming that earnings increase.
c. Opportunity cost is a meaningless concept in this situation.
d. The college students are completely correct in all respects.
e. There is still an opportunity cost, even if it is justified by higher future earnings.
e
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According to the quantity theory of money, increasing the money supply:
A. leads to inflation. B. causes production to increase. C. leads to decreased spending. D. causes each dollar to be spent less often.
When a good is more broadly defined (for example, Starbucks Caramel Macchiato versus coffee),
a. it will have more available substitutes so demand will be more elastic. b. it will have more available substitutes so demand will be less elastic. c. it will have fewer available substitutes so demand will be more elastic. d. it will have fewer available substitutes so demand will be less elastic.
If the supply for a product increases, but the demand for the product stays the same, which of the following would happen?
a. There will be a scarcity of the product. b. There will be an equilibrium of the product. c. There will be a shortage of the product. d. There will be a surplus of the product.
(Advanced analysis) Assume the consumption schedule for a private closed economy is C = 40 + .75Y, where C is consumption and Y is gross domestic product. The multiplier for this economy is:
A. 3. B. 4. C. 5. D. 10.