Opportunity cost is
A. the value of the most useful alternative that must be sacrificed to obtain something or satisfy a want.
B. the fixed cost of production.
C. the value of the next-best alternative that must be sacrificed to satisfy a want.
D. the cost of producing all goods and services in the United States.
Answer: C
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Automatic stabilizers are changes in ________ that occur automatically as economic activity changes
A) taxes and transfer payments B) the money supply C) unemployment D) inflation
A decrease in the interest rates in a country:
A) increases net exports. B) does not affect net exports. C) reduces net exports. D) results in an inflow of capital to the country.
Standard life-cycle analysis predicts that a stock market crash that suddenly reduces the sale value of stocks ________ consumption expenditures
A) reduces B) increases C) has no effect on D) All of the above are possible with a market crash.
According to Coase, firms emerge when
a. transaction costs in the market are less than the cost of hierarchical control b. transaction costs in the market are more than the cost of hierarchical control c. prices in the market are less than the cost of hierarchical control d. prices in the market are more than the cost of hierarchical control e. implicit contracts in the market can be made explicit in a firm