Anthony and Kelly decide to watch a movie on Netflix using a promotion code so they do not need to pay for that movie. We know that
A. neither bears an opportunity cost since neither needs to pay for the movie.
B. both bear an opportunity cost that depends on what each person is giving up to watch the movie.
C. both bear the same opportunity cost because they are seeing the same thing.
D. both bear the same opportunity cost because the tickets have the same face value.
Answer: B
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How does an increase in the relative price of a country's goods in terms of foreign goods, or real exchange rate, affect its balance of trade?
A) An increase in the real exchange rate reduces imports, raises exports, and increases the balance of trade. B) An increase in the real exchange rate raises imports, reduces exports, and reduces the balance of trade. C) An increase in the real exchange rate reduces imports, raises exports, and reduces the balance of trade. D) An increase in the real exchange rate raises imports, reduces exports, and increases the balance of trade.
Assume that the currency—deposit ratio is 0.3 and the reserve—deposit ratio is 0.2. What is the money multiplier?
A) 1.5 B) 2.0 C) 2.6 D) 5.0
Assume that Ford Motor Company engineers achieve a revolutionary technological breakthrough in the production process of automobiles. Which of the following is expected to take place?
a. A movement up along the existing supply curve for Ford automobiles b. The supply of Ford automobiles will remain unchanged c. An inward shift of the supply curve for Ford automobiles d. A downward movement along an existing supply curve for Ford automobiles e. An outward shift of the supply curve for Ford automobiles
Economists believe that people's wants are
A) finite. B) infinite. C) irrational. D) unimportant because needs are more important than wants.