The opportunity cost of an action includes:
a. the monetary expenses incurred as a result of the action
b. the highest valued alternative use of the time spent on the action.
c. the benefits received as a result of the action.
d. only a. and b.
d
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For choice sets emerging from "exogenous" income, the budget line will shift parallel whenever both prices change by the same percentage.
Answer the following statement true (T) or false (F)
Goods that consumers regard as luxuries generally have
a. an income elasticity equal to 1. b. an income elasticity less than 1. c. an income elasticity greater than 1. d. a negative income elasticity.
Refer to the accompanying table below. The average cost of 5 units of activity is:Units of ActivityTotal CostTotal Benefit0$0$01$2$122$6$223$12$304$20$365$30$406$42$427$56$43
A. $4 B. $6 C. $10 D. $8
Given the strict quantity theory of money, if the quantity of money were decreased by 50 percent, prices would:
A. fall by 50 percent. B. rise by 50 percent. C. increase by 100 percent. D. decrease by 100 percent.