The value of the best alternative sacrificed to obtain something you want is referred to as
A. opportunity cost.
B. tangible cost.
C. accounting cost.
D. explicit cost.
Answer: A
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Suppose that Year 2 is the base year. The CPI for Year 1 is approximately
A) 80.0. B) 90.0. C) 100.0. D) 120.0.
The formula for nominal GDP is
a. Nominal GDP = Real GDP + GDP Deflator. b. Nominal GDP = Real GDP – GDP Deflator. c. Nominal GDP = GDP Deflator / Real GDP. d. Nominal GDP = GDP Deflator x Real GDP.
Suppose that Firms A and B each produce high-resolution computer monitors, but Firm A can do so at a lower cost. Cassie and David each want to purchase a high-resolution computer monitor, but David is willing to pay more than Cassie. If Firm A produces a monitor that Cassie buys but David does not, then the market outcome illustrates which of the following principles? (i) Free markets allocate
the supply of goods to the buyers who value them most highly, as measured by their willingness to pay. (ii) Free markets allocate the demand for goods to the sellers who can produce them at the least cost. a. (i) only b. (ii) only c. both (i) and (ii) d. neither (i) nor (ii)
Regardless of the cost structure of firms in a competitive market, in the long run
a. firms will experience rising demand for their products. b. the marginal firm will earn zero economic profit. c. firms will experience a less competitive market environment. d. exit and entry is likely to lead to a horizontal long-run supply curve.