The term opportunity cost refers to the
A. Financial costs of all the factors of production used to produce a good or service.
B. Value of every other good given up when a good or service is obtained.
C. The most desired good or service given up when something is obtained.
D. Amount of resources used to produce a good but not a service.
Answer: C
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When the consumer is at his or her best affordable consumption point, it is the case that the marginal rate of substitution is
A) greater than the price ratio. B) equal to the price ratio. C) less than the price ratio. D) maximized.
The velocity of money is
A) the average number of times that a dollar is spent in buying the total amount of final goods and services. B) the ratio of the money stock to high-powered money. C) the ratio of the money stock to interest rates. D) the average number of times a dollar is spent in buying financial assets.
Collusion always involves firms engaging in a
A) vertical merger. B) horizontal merger. C) cooperative game. D) noncooperative game.
Scarcity is a problem that
a. exists only in the poorer countries of the world b. would disappear if resources were less limited c. can be solved by rapid advances in technology d. exists in every economy e. the rich have solved