Joe College's parents pay for his room and board, tuition, and books for going to a university. They also give him some spending money which he spends on going to the pub or to the movies Suppose that Joe's spending money doubles and the price of movies doubles. Determine the impact of these changes by evaluating the following statements.

Statement I: The opportunity cost of going to the movies rises and the opportunity cost of going to the pub stays the same.

Statement II: It is now possible for Joe to spend more at the movies and at the pub.

Statement III: The opportunity cost of going to the movies or the pub does not change.

Which statement or statements are true?

A. I only

B. II only

C. III only

D. II and III only

E. land III only

Answer rating: 100% (QA)

B II only Increase in price of money inc... View the full answer