You own a building that has four possible uses: a cafe, a craft store, a hardware store, and a bookstore. The value of the building in each use is $2,000; $3,000; $4,000; and $5,000, respectively. You decide to open a hardware store. The opportunity cost of using this building for a hardware store is
A. $3,000, the value if the building is used as a craft store.
B. $2,000, the value if the building is used as a cafe.
C. $10,000, the sum of the values if the building is used for a cafe, a craft store, or a bookstore.
D. $5,000, the value if you rented the building to someone else to use as a bookstore.
Answer: D
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In the RBC model, an adverse supply shock causes the decrease in natural real GDP to be minimized when the labor supply curve is
A) downward sloping and extremely flat. B) upward-sloping and extremely flat. C) upward-sloping and extremely steep. D) vertical.
A German who exchanges euros for dollars in a U.S. airport is
a. contributing to U.S. exports b. lending dollars to Germans c. participating in the foreign exchange market d. engaging in speculative activities e. engaging in illegal activities
When the federal government owns parks that are funded by tax dollars,
a. park managers receive full information about visitor desires and make decisions accordingly. b. the same incentive structure exists for public park managers as private park managers. c. park managers devote much time and effort to satisfying political desires instead of visitor desires. d. park managers will be less likely to mismanage the park.
Historically, one of the most common reasons for countries to impose tariffs was
A) to protect their national security. B) to raise revenue for the government. C) to eliminate unemployment. D) to counter inflation. E) None of the above.