Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point B to Point D, the opportunity cost of motorcycles, measured in terms of hybrid cars,
A. increases
B. remains constant.
C. initially increases, then decreases.
D. decreases.
Answer: A
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Trade-offs can always be considered in terms of opportunity costs.
Answer the following statement true (T) or false (F)
If labor supply and labor demand both increase, employment
a. and the real wage rate will both increase b. will increase but the real wage rate will fall c. will increase but the real wage rate will remain constant d. and the real wage rate will remain constant e. will increase but the effect on the real wage rate will depend on the magnitude of the shifts
In the presence of purchasing-power parity, if one dollar exchanges for two British pounds and if a VCR costs $400 in the United States, then in Great Britain the VCR should cost
a. 200 pounds b. 400 pounds c. 600 pounds d. 800 pounds
Which of the following best reflects the ability-to-pay philosophy of taxation?
A. An excise tax on coffee B. An excise tax on gasoline C. A progressive income tax D. A tax on residential property