If a major league baseball player would be willing to work for $500,000 per year and is currently being paid $1,200,000 per year, the opportunity cost of his decision to play baseball is
A. $1,700,000.
B. $500,000.
C. $700,000.
D. $1,200,000.
Answer: B
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Answer the following statement(s) true (T) or false (F)
1. The amount of output produced by two firms in a Cournot oligopoly setting is greater than that produced by a monopoly, but smaller than that which would be produced if the market were perfectly competitive. 2. According to the Bertrand model, price and output is higher under oligopoly than under competition. 3. A firm has monopoly power when it is the single seller of a good or service. 4. If a monopoly desires to raise its profits, it can simply raise the price it charges. 5. We know that the producer's surplus accruing to a simple monopoly firm must be greater than operating in a competitive market, else firms would not act as monopolists.
The costs associated with recalculating prices and printing new price lists when there is inflation are known as
A) menu costs. B) diminishing costs. C) shoe leather costs. D) chain-index costs.
One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired. B. prices tend to adjust more quickly downward than upward. C. wages are sticky downward. D. input prices increase with output prices.
Which of the following is NOT a valuable role of government in a free market society?
A. To enhance rent-seeking activities. B. To reduce market power. C. To provide public goods. D. To reduce negative externalities.