Explain what is meant by the term opportunity cost
What will be an ideal response?
The opportunity cost of something is measured by the next best alternative that we forgo, or give up, when we make a choice or a decision.
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The ________ is the cost of paid by the producer plus any cost paid by everyone else when another unit of a good or service is produced
A) marginal external cost. B) marginal private cost. C) marginal social cost. D) None of the above answers is correct.
U.S. exports are goods and services
A) produced abroad and sold to Americans. B) produced in the United States and sold to Americans. C) produced abroad and sold to foreigners. D) produced in the United States and sold to foreigners.
A good salesperson can sell $1,000,000 worth of goods, while a poor one can sell only $100,000 worth of goods. Job applicants know if they are good or bad, but the firm does not
A firm will offer job applicants a choice between a fixed salary of $25,000 or 20% commission. Assuming risk-neutral salespersons and the possibility of opportunistic behavior, will this choice of contracts allow the firm to distinguish between good salespersons and bad ones before the hiring decision is made?
A price floor policy establishes a minimum price for a market. Which of the following results from a binding price floor?
A) Equilibrium B) Excess demand C) Excess supply D) Shortage