Laura can type a manuscript in two hours and her opportunity cost of one hour is $25. Spencer can type the same manuscript in one hour and his opportunity cost of one hour is $40. If Laura is charged with typing the manuscript, can both be made better off if Laura pays Spencer to type the manuscript instead? Explain.
What will be an ideal response?
Laura's opportunity cost of typing the manuscript is $50 while Spencer’s opportunity cost is only $40. Laura could pay Spencer any amount between $40 and $50 to type the manuscript and both would be better off. For instance, if she paid him $45, each would benefit by $5.
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A) World Bank B) European Central Bank C) IMF D) International Bank for Reconstruction and Development
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(a) reflected the sharp increase in costs as the boom gathered strength. (b) occurred when building costs remained stable. (c) occurred in the presence of sharply falling costs that anticipated the 1929 crash. (d) was a result of the contractionary monetary policies of the Fed.
Government revenue from an excise tax of a given amount is greater when demand is relatively inelastic than when it is relatively elastic
Indicate whether the statement is true or false