Opportunity cost
A. does not exist since there are no receipts.
B. is always the value of the next best forgone opportunity.
C. can only be measured as a paid cost.
D. is always the lowest valued alternative.
Answer: B
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Possible barriers to entry of new firms into an industry
a. include patents and controls over raw materials. b. enable monopolists to enjoy long-run profits. c. may consist of substantial economies of scale. d. All of these.
If a change is a Pareto improvement, then
A) we also achieve Pareto efficiency. B) consumer surplus is maximized. C) it also passes the cost-benefit test. D) the distributional effect is likely to be regressive.
Mutual interdependence among firms in an oligopoly means that:
a. firms never practice price leadership. b. firms never form a cartel. c. it is difficult to know how firms will react to decisions of rivals. d. no formal agreement is possible among firms.
The United States decides what goods to produce by letting
a. only the government decide b. members of Congress decide c. only the producers decide d. the producers and consumers decide