Both an NBA basketball player and a fast-food cook are going to graduate school. Who has a higher opportunity cost? Explain
What will be an ideal response?
The opportunity cost is the income lost while going to graduate school. An NBA basketball player typically earns much more than does a fast-food cook so that the opportunity cost of going to graduate school is likely to be higher for the NBA basketball player than for the fast-food cook.
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Suppose a consumer wants to obtain the highest possible satisfaction from goods purchased on a fixed budget. Which of the following must be equal for all goods?
a. Total utility. b. Marginal utility. c. Average utility. d. Marginal utility per dollar.
Which of the following most accurately describes the long-run period? a. The long run is a period of time in which a firm is unable to vary some of its factors of production
b. In the long run, the firm is able to expand output by utilizing additional workers and raw materials, but not physical capital. c. The long run is of sufficient length to allow a firm to alter its plant capacity and all other factors of production. d. The long run is of sufficient length to allow a firm to transform economic losses into economic profits.
Suppose sharply higher coffee prices lead to an increase in demand for tea. As tea prices increase, tea producers experience short-run economic profits. If the tea industry is a price-taker industry and if sufficient time is allowed for the market to adjust fully to the increase in demand for tea, one would expect the tea industry's output to
a. increase, and economic profits to increase as well. b. increase, and economic profits to disappear. c. decline, and economic profits to increase. d. decline, and economic profits to disappear.
In the equation of exchange, GDP divided by the money supply is equal to
A) M. B) V. C) P. D) Q.