The president of a large public university proclaims, "If we can get the state government to fund our new football stadium, it will not cost us anything." Evaluate this view from an economic perspective
While it may not directly affect the university's budget, the cost will be borne by taxpayers. Also, there will be opportunity costs brought about by diverting stadium funding from roads, hospitals, or primary schools. We also should not ignore the fact that the state may reduce its funding of the university in other areas, such as student financial aid, to compensate for the cost of the football stadium.
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A common feature of regulated industries is cross-subsidization, which is a situation when one group of customers pays prices above costs while another group of customers pays prices below costs. The one group is subsidizing the other group
Is this practice more consistent with the capture hypothesis or the share-the-gains, share-the-pains theory? Explain.
There are two types of costs associated with production: ____ costs that require monetary payments, and ____ costs that do not
a. implicit; accounting b. accounting; explicit c. implicit; explicit d. explicit; implicit
What are royalties?
a. fees paid to celebrities for using their names b. fees paid to law firms and accountants c. a percentage of profits paid to the government d. a percentage of earnings paid for a franchise
An aggregate demand curve
A. shifts to the right when a non-price level change increases total planned real expenditures. B. shifts to the right when a non-price level change decreases total planned real expenditures. C. does not shift to the right or to the left. D. shifts to the right when the price level falls.