In an attempt to boost enrollment, in January, 1996, a private college in Iowa offered free tuition for graduating high school seniors from the county where it is located. For students who accepted the offer, how did this offer affect the opportunity cost of attending college?
a. The opportunity cost did not change, since lost earnings were still a factor.
b. The opportunity cost became zero for the typical student.
c. The opportunity cost was very low, because the only cost was for books and supplies.
d. The opportunity cost did not change, since tuition was not a factor in computing opportunity cost.
e. The opportunity cost was lower than if tuition was charged, but there was still a cost.
e
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The economic way of thinking assumes individuals
A) are irrational. B) are only concerned with "number one" (i.e., themselves). C) try to advance their own projects. D) cannot possibly behave in the interests of others.
Assume that food is measured on the horizontal axis and clothing on the vertical axis. If the price of food falls relative to that of clothing, the budget line will:
A) become flatter. B) become steeper. C) shift outward. D) become steeper or flatter depending on the relationship between prices and income.
An decrease in the price of oranges would lead to a(n)
a. increased supply of oranges. b. increase in the prices of inputs used in orange production. c. a movement down and to the left along the supply curve for oranges. d. a movement up and to the right along the supply curve for oranges.
Briefly describe the practice of predatory pricing