An ice cream cone costs 1.50. A can of soda costs 0.75. The relative price of an ice cream cone is
A) 1/2 can of soda per ice cream cone, the opportunity cost of an ice cream cone.
B) 1.50, the opportunity cost of a can of soda.
C) 2 cans of soda per soda, the opportunity cost of an ice cream cone.
D) 0.75, the opportunity cost of a can of soda.
Question 2
The price of a DVD rental is 2.50 and the price of a downloaded movie is 1.00. If the price of a DVD rental falls by 0.50, the relative price a downloaded movie
A) rises.
B) falls.
C) does not change.
D) might change but more information is needed.
Question 3
The idea that a government budget deficit decreases investment is called
A) government dissaving.
B) the crowding-out effect.
C) the Ricardo-Barro effect.
D) the capital investment effect.
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