The concept of opportunity cost describes:
(a) The lost benefits that result from a decision taken by a consumer;
(b) The lost benefits of the next best alternative to the decision taken;
(c) The cost in interest to acquire the funds needed to make a decision;
(d) None of the above.
Answer: (b) The lost benefits of the next best alternative to the decision taken;
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An example of a microeconomic decision is a situation in which
A) the Federal Reserve considers how much to increase the money supply during the coming month in an effort to constrain the rate of inflation. B) Congress and the president seek to reach a compromise on how much to increase government spending in an effort to influence national expenditures. C) a firm evaluates how much to reduce the price of its product in an effort to influence sales and boost its profits. D) the U.S. Treasury contemplates buying foreign currencies in an effort to influence exchange rates with an aim to boosting demand for U.S. goods and services.
If the inflation rate in Japan is higher than the inflation rate in the United States
A) there will be an increase in U.S. imports from Japan. B) there will be an increase in Japanese exports to the United States. C) there will be no change is U.S. imports from Japan. D) there will be a decrease in U.S. imports from Japan.
Monopoly is a market structure characterized by a:
a. single firm operating as a price taker. b. few firms operating as price takers. c. single firm that is not a price taker. d. none of these.
Which of the following statements is true about profit-related income? a. It results from hiring workers below the marginal contributions they make to the enterprise
b. It consists of rents derived from the sole ownership of capital. c. It is the reward for undertaking the uncertainties of enterpreneurship. d. It equals the entrepreneur's opportunity costs of labor and money capital. e. It is the same as wage-related rents, except it is the entrepreneur who gets it.