You paid $35 for a ticket (which is non-refundable) to see SPAM, a local rock band, in concert on Saturday. Assume that $35 is the most you would have been willing to pay for a ticket. Your boss called, and she is looking for someone to cover a shift on Saturday at the same time as the concert. You would have to work 4 hours and she would pay you $11/hr. The psychic cost to you of working is $2/hr. Should you go to the concert instead of working Saturday?
A. Yes, the benefit of going to the concert is more than the cost.
B. No, because there are no benefits of going to the concert.
C. No, the benefit of going to the concert is less than the cost.
D. Yes, the benefit of going to the concert is equal to the cost.
Answer: C
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The curve in the above graph:
A. can only be a perfectly inelastic demand curve.
B. can only be a perfectly inelastic supply curve.
C. may be either a perfectly inelastic demand curve or a perfectly inelastic supply curve.
D. can be neither a perfectly inelastic demand curve nor a perfectly inelastic supply curve.
In the case of a normal good,
A) demand curves always slope downward. B) the income effect and substitution effect are in the same direction. C) the Engel curve slopes upward. D) All of the above.
Over twenty years ago the city of Washington D.C. was facing a budgetary shortfall. In a plan to increase tax revenue the mayor and city council agreed to raise the excise tax on gasoline
Typically for goods like gasoline which are price inelastic this should have led to an increase in tax revenue. However, just the opposite happened – tax revenue plummeted! What could explain this seemingly paradoxical result?
Why are bonds risky to a corporation?
What will be an ideal response?