Fred and Ann Are Both Given Free Tickets to See

question 131

Multiple Choice

Fred and Ann are both given free tickets to see a movie. Both decide to see the same movie. We know that

• A) both bear an opportunity cost of seeing the movie because they could have done other things instead of seeing the movie.
• B) both bear the same opportunity cost of seeing the movie because they are doing the same thing.
• C) it is not possible to calculate the opportunity cost of seeing the movie because the tickets were free.
• D) the opportunity cost of seeing the movie is zero because the tickets were free.

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Definitions:

Macroeconomic Theory

A branch of economics that studies the behavior and performance of an economy as a whole, including issues like inflation, unemployment, and national income.

Supply-Sider

An advocate or supporter of supply-side economics, a school of economic thought that emphasizes the benefits of making goods and services more available to consumers.

Expansionary Monetary Policy

To fight recessions, the Federal Reserve increases the money supply.

Rational Expectations Theory

An economic idea that posits individuals make predictions about future events based on their past experiences and available information, effectively using all available information to form expectations about economic variables.