Why is a sunk cost not part of the opportunity cost of a decision?
A. Sunk costs are a part of the opportunity cost of a decision.
B. Because the expense would too often outweigh the benefits.
C. Because the money is gone, regardless of the decision made.
D. Because the chances of recouping it are infinitesimally small.
Answer: C
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Under a system of rent controls, landlords are more likely to
A) discriminate against middle aged tenants. B) discriminate against students. C) discriminate against wealthy tenants. D) experience high vacancy rates. E) maintain apartments in better condition.
A species of snakes became extinct due to pollution in a river where the snakes once lived. This is an example of
a. a market failure caused by an externality. b. a market failure caused by market power. c. a market failure caused by equality. d. There is no market failure in this case.
When taxes are imposed on a commodity,
a. there is never a deadweight loss. b. some consumers alter their consumption by not purchasing the taxed commodity. c. tax revenue will rise by the amount of the tax multiplied by the before-tax level of consumption. d. the taxes do not distort incentives.
What is the most important characteristic of monopolistic competition? How do firms behave differently from perfect competitors?
What will be an ideal response?