You decide to quit your $40,000 a year job to go back to school. Your rent is $9,600 per year, you spend $6,000 per year on food, your tuition costs $24,000 per year, and textbooks cost $3,000 per year
Based on these numbers, what are your yearly explicit and implicit costs of going back to school?
Your explicit costs include tuition and textbooks, which total $27,000. Your implicit costs involve the salary you give up to go back to school, or $40,000. Since you would be paying rent and buying food whether you continued working or went back to school, these costs are not included in the explicit costs of going back to school.
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Using Figure 1 above, if the aggregate demand curve shifts from AD2 to AD1 the result in the long run would be:
A. P4 and Y1. B. P4 and Y2. C. P5 and Y1. D. P5 and Y2.
There has been a decrease in the demand for socks. This change can be shown graphically as a:
A. shift in the demand curve to the left. B. shift in the demand curve to the right. C. movement along the demand curve to the right. D. movement along the demand curve to the left.