Moe Has a Big Exam Tomorrow

question 33

Multiple Choice

Moe has a big exam tomorrow. He considered studying this evening, but decided to go out with Curly instead. Since Moe always chooses rationally, it must be true that:

• A) the opportunity cost of studying tonight is less than the value Moe gets from spending time with Curly.
• B) the opportunity cost of studying tonight is equal to the value Moe gets from spending time with Curly minus the cost of earning a low grade on the exam.
• C) Moe gets more benefit from spending time with Curly than from studying.
• D) Moe gets less benefit from spending time with Curly than from studying.

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Definitions:

Economy

The system of production, distribution, and consumption of goods and services within a particular geographic region.

Excise or Sales Taxes

Taxes imposed on the sale of specific goods and services, often included in the price paid by the consumer.

Tax Revenue

The revenue obtained by governments from taxes.

Economic Factors

Variables such as inflation, interest rates, economic growth, and unemployment that influence the performance of an economy.