Mikhail and Stefan Are Both Artists Who Can Create Sculptures

question 125

Multiple Choice

Mikhail and Stefan are both artists who can create sculptures or paintings each day.The following table describes their maximum outputs per day.Use this table to answer the following questions.

-What is Stefan's opportunity cost of a painting?

• A) 1/3 painting
• B) 1/3 sculpture
• C) 2/5 sculpture
• D) 3 paintings
• E) 3 sculptures

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Definitions:

Supply-side Economics

An economic theory that argues economic growth can be most effectively fostered by lowering taxes and decreasing regulation to increase production.

Tax Cuts

Reductions in the amount of taxes imposed by a government, often aimed at stimulating economic growth by increasing disposable income or encouraging investment.

Labor Supplied

The overall time period that workers consent to and can offer to work, in exchange for an established rate of pay.

Laffer Curve

A theoretical representation of the relationship between government revenue raised by taxation and all possible rates of taxation, suggesting that higher tax rates beyond a certain point actually decrease total revenue.