Brooke and Sandy both attend the same college and have the same expenses for tuition, books, and supplies. However, Brooke is a famous actress who could earn $2 million per year if she were not attending college whereas Sandy could earn $10,000 a year serving hamburgers if he were not attending college. It follows that the opportunity cost of attending college:
A. is greater for Brooke than for Sandy.
B. for Brooke and Sandy cannot be compared.
C. is greater for Sandy than for Brooke.
D. is the same for both Brooke and Sandy.
Answer: A
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According to Keynes, if private sector demand is insufficient to maintain full employment, the government should: a. make the economy's natural transition to a lower level of employment as easy as possible. b. shock the economy with an increase in aggregate demand
c. reduce aggregate supply to reduce inflation. d. print money to promote consumer spending. e. take steps to increase aggregate supply in an economy.
Holding the nonprice determinants of supply constant, a change in price would
a. result in either a decrease in supply or an increase in supply. b. result in a movement along a stationary supply curve. c. result in a shift of demand. d. have no effect on the quantity supplied.