Wichita is building a convention center and financing it with revenues raised from a city hotel tax. Local politicians assert that the convention center is essentially free for Wichita residents because out-of-town visitors are paying for it
Someone who is practicing the economic way of thinking would disagree because A) they believe that Wichita does not need a new convention center.
B) there are other projects that could be undertaken with the tax funds.
C) the convention center may not pass a marginal cost-benefit test.
D) the hotel tax may lead to a decline in visits to Wichita.
E) the hotel tax may reduce commercial property values in the area.
B
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The change in consumption that results from a change in the relative price of goods while staying on the same indifference curve is the
A) income effect. B) substitution effect. C) indifference effect. D) price effect.
Dogs are more popular than cats in the U.S., but if cats were to become the more popular pet, then we can we expect that in the market for cat-food workers
a. MPP increases b. MRP increases c. MPP decreases d. MRP decreases e. the wage rate decreases