Suppose you have an hour before your next class starts. You can either read a book, get something to eat, or take a nap. The opportunity cost of getting something to eat is
a. the cost of what you eat
b. the value of reading and sleeping
c. the loss of value from not reading or sleeping
d. the net benefit of sleeping for another hour
e. impossible to determine because the most preferred alternative is not known
E
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An optimal decision is one that chooses
A. the most desirable alternative among the possibilities permitted by the resources available. B. the lowest cost method of meeting goals, without regard to quality or any other feature. C. among various possible goals and offends no one, so that all are equally happy. D. among equally important goals, and thereby avoids the “indispensable necessity” syndrome. E. among possible goals in such a way that spends as little money as possible.
Empirical studies conclude that advertising
A) raises prices in all markets. B) can reduce the prices of many goods. C) reduces the prices on all goods. D) has no impact on prices.
A cost imposed on people other than the consumers of a good or service is a:
a. price floor. b. negative externality. c. positive externality. d. price externality.
If a tax is levied on the sellers of flour, then
a. buyers will bear the entire burden of the tax. b. sellers will bear the entire burden of the tax. c. buyers and sellers will share the burden of the tax. d. the government will bear the entire burden of the tax.