Author Question: If property taxes were increased in a city, what would be the most likely effect on residential ... (Read 56 times)

jrubin · **on:** Jun 29, 2018

If property taxes were increased in a city, what would be the most likely effect on residential rents after two or three months? They would probably

A) fall.
B) rise in proportion to taxes.
C) rise more than in proportion to taxes.
D) stay roughly unchanged.

Question 2

The figure above represents the production possibilities frontier for a country.

a) The nation is currently producing at point B and wants to move to point C. What is the opportunity cost of the move?
b) The nation is currently producing at point B and wants to move to point A. What is the opportunity cost of the move?

frankwu0507 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

D

Answer to Question 2

a) By moving from point B to point C, the production of automobiles decreases by 1 million, from 3 million to 2 million. The 1 million decrease in automobiles is the opportunity cost of the movement.
b) By moving from point B to point A, the production of cameras decreases by 3 million, from 3 million to 0 million. The 3 million decrease in cameras is the opportunity cost of the movement.