26. You are going to travel across Europe this summer. You incur the following costs for the trip: $2,000 for a plane ticket, $2400 for food, $4,000 for housing, and $3,000 for entertainment. Had you not gone on the summer trip, you could have worked at a landscaping company earning $12,000, or as a server in a restaurant earning $14,400 while living at home with your parents rent-free. What is the opportunity cost of deciding to travel? a. $14,400 b. $12,000 C. $25,800 d. $37,800 IIIIIIIIIIII Figure 5 22 Price 21 Supply (Private cost) Social Value Demand (Private Value) Q1 Q2 Q3 Q4 Quantity 27. Refer to Figure 5. Which quantity represents the social optimum for this market? a. Q1 b. Q2 C . Q 3 d. Q4 28. Refer to Figure 5. To internalize the externality in this market, what should the government do? a. provide an investment credit b. impose a tax on this product c. provide a subsidy for this product d. produce the product itself Page 10 of 19ARKPLUGS T NRR 33dB FOAM EARPLUGS AS/NZS SLG80 29dB, CLASS #6604 UNCOR 29. When do economies of scale occur? Ideas that W a. When long-run average total costs rise as output increases. b. When long-run average total costs fall as output increases. c. When average fixed costs are falling. d. When average fixed costs are constant. 30. A firm in a monopolistically competitive market operates much like what type of firm? a. a monopoly in the short-run and a perfectly competitive firm in the long-run b. an oligopoly in the short-run and a monopoly in the long-run C. a monopoly in the short-run and long-run d. a perfectly competitive firm in the short-run and an oligopoly in the long-run Figure 13 Good Y .E .C IC3 IC2 B Good X 31. Refer to Figure 13. Which of the following occurs at point A? a. MRSXY > PY/Px b. MRSXY = Px/PY c. MRSXY > PX/PY d. MRSXY