Applying the concept of opportunity cost to the pollution of a lake, an economist probably would conclude that:
A. pollution should be eliminated as long as the opportunity cost of a cleanup exceeds the cost of the resources required for the cleanup.
B. pollution should be eliminated as long as the benefit from a cleanup exceeds the opportunity cost.
C. no pollution in the lake should be eliminated regardless of benefit.
D. all pollution in the lake should be eliminated regardless of cost.
Answer: B
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A. 120,000 B. 30,000 C. 90,000 D. 60,000
One reason why the average salary of Major League Baseball players is higher than the average salary of college professors is
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What do we need to assume about firms in the sticky price model?
A) They accommodate any demand at the given price. B) They hire until the real wage equals the average labor productivity. C) They maximize only current profits. D) They adapt the price to current conditions.
Under the original Gramm-Rudman-Hollings Act, a congressionally enacted budget deficit that was larger than the targeted amount would
A. result in both automatic tax cuts and spending increases. B. result in automatic spending cuts. C. result in automatic tax cuts. D. result in automatic spending increases.