Suppose that your tuition to attend college is $14,000 per year and you spend $5

Question

Suppose that your tuition to attend college is $14,000 per year and you spend $5,000 per year on room and board. If you were working full time, you could earn $26,000 per year. What is your opportunity cost of attending college?

A. $19,000

B. $31,000

C. $40,000

D. $45,000

When supply increases and the supply curve shifts to the right, equilibrium price and equilibrium quantity- will both increase.

True
False

The midpoint formula for elasticity- of demand solves the problem of:

A. whether elasticity- of demand is really- positive or negative.

B. whether to use quantity- or price in the numerator.

c. whether to use quantity- demanded or supplied.

D. which price or quantity- to use as the initial value of the variable.

When the price of pens went from $1 to $1.50, the quantity- demanded of pencils changed from 50 to 75 a day. The cross elasticity of demand for pens (using the initial value formula) is:

A. 0.4.

B. 0.8.

C. 0.2.

D. Cannot be determined from the information provided.

Explanation / Answer

1.opportunity cost=(14000+5000+26000)

=45000

2.false(equilibrium price decreases and equilibrium quantity increases)

3.D. which price or quantity- to use as the initial value of the variable.

4. cross elasticity=percentage change in demand for the first good that occurs in response to a

percentage change in price of the second good

D. Cannot be determined from the information provided.(Answer)

here cross elasticity of demand for pencils can only be measured but not for pens

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