In the 1990s, the Monks of St. Benedict's the Monks determined that their ________ were ________ in the egg and cookie business, so they ________ .
A) opportunity costs; too low; switched to providing private retreats
B) opportunity costs; too high; switched to providing private retreats
C) profits; too high; went out of business
D) operating costs; too low; opened a new business
Ans: B) opportunity costs; too high; switched to providing private retreats
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The currency crisis of 1992 caused France and a number of other countries to choose between
A) a single currency for the EU and keeping their own currency. B) doing the right thing for their domestic economy and defending the exchange rate. C) lowering interest rates and reducing unemployment. D) competitive devaluations and falling unemployment. E) the Maastricht Treaty and the Single European Act.
If a federal agency requested funds to build a dam on an Idaho river to irrigate nearby farmland used for growing potatoes, the most active support for the project probably would come from
a. potato farmers who own land that wouldn't be irrigated by the project. b. taxpayers who would pay for the project. c. consumers of potatoes who might benefit from an expansion in supply and slightly lower potato prices. d. potato farmers who own the land to be irrigated.
The opportunity cost of constructing a new public highway is the:
A. Money cost of hiring contractors and construction workers for the new highway B. Value of other goods and services that are sacrificed in order to construct the new highway C. Expected cost of constructing the new highway in a future year D. Value of shorter driving times and distances when the new highway is completed
John has a math test tomorrow. He has decided to go to the gym today and then study math for several hours. Which of the following statements is TRUE?
A. John's decision on how to allocate his time is consistent with the rationality assumption since the decision is intended to make him better off. B. John's decision does not involve his pursuit of self-interest. C. John's decision on how to allocate his time is inconsistent with the rationality assumption since he has decided to go to the gym. D. John did not use the economic way of thinking because his decision on how to allocate his time did not involve money.