When people make decisions about the quantity of education to undertake, they balance the marginal social benefit against the marginal private cost
Indicate whether the statement is true or false
FALSE
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The fixed-cost fallacy occurs when
a. A firm considers sunk costs in making decisions b. A firm ignores relevant costs c. A firm considers overhead or depreciation costs in making decisions d. Both a and c
The winner's curse is more likely when the value of a good at auction is common knowledge
a. True b. False
Carl is considering attending a concert with a ticket price of $35 . He estimates that the cost of driving to the concert and parking there will total an additional $20 . In order to attend the concert, Carl will have to take time off from his part-time job or forgo studying for an exam scheduled for the next morning. He estimates that he will lose 5 hours at work, at a wage of $6 per hour, or 5
hours of study time. If Carl considers studying the best alternative use of his time, his opportunity cost of attending the concert equals a. $55 b. $55 plus the value of the higher exam grade he could earn by studying for 5 hours c. $85 plus the value of the higher exam grade he could earn by studying for 5 hours d. $85 minus the value of the higher exam grade he could earn by studying for 5 hours e. $55 minus the value of the higher exam grade he could earn by studying for 5 hours
For any competitive labor market, what change would have to occur to cause the labor supply to decrease and shift the supply curve left?
A. Opportunity cost of work increases B. None of these statements is true. C. Number of workers increases D. Number of firms increases