The opportunity cost of an action is:
a. the value of the best foregone alternative
b. the difference between the benefits that result and the expenses incurred as a result of the action.
c. the same as the expected benefit of the action.
d. the same for everyone who undertakes the action.
a
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The data in the table above shows the consumption by families in a small (poor) economy. The families consume only salt and bread. The reference base period is 2011. The inflation rate between 2011 and 2012 is
A) 52.5 percent. B) 123.1 percent. C) 23.1 percent. D) 18.8 percent. E) 118.8 percent.
If a tariff of $10 has no effect on the world price, the optimal tariff on that product
A) is $10. B) is zero. C) is higher than $10. D) depends upon the amount of government revenue collected.
The manager of Slick Lens, a sunglasses manufacturer, notices that the cost to distribute their sunglasses in the spot market has risen. As a result of the change, which of the following is true?
A) The manager has more of an incentive to integrate forward. B) The manager has more of an incentive to integrate backward. C) The manager has less of an incentive to integrate forward. D) The manager has less of an incentive to integrate backward.
In a market system, the major coordination tasks are carried out
a. with the approval of central planners. b. as part of the regular appropriation process of Congress. c. irregularly by the major corporations. d. automatically by the market mechanism.