Assume that an individual spends his income on sweaters and ...

[skymedlock]

Assume that an individual spends his income on sweaters and shirts. If the price of a sweater increases:
 
  A) the opportunity cost of buying sweaters increases.
  B) the opportunity cost of buying sweaters decreases.
  C) the opportunity cost of buying shirts increases.
  D) There is no change in the opportunity cost of consuming either good.

Question 2

The figure above shows the marginal social cost curve of generating electricity, the marginal private cost curve, and the demand curve.
 
  If the government imposes a pollution tax to achieve the efficient level of production, the tax equals ________ per kilowatt hour. A) 0
  B) 7.5
  C) 10
  D) 15
  E) 2.5

[jrpg123456]

Answer to Question 1

A

Answer to Question 2

B