The calculation of opportunity cost includes not only explicit monetary costs but also:
a. sunk costs.
b. transport costs.
c. implicit costs.
d. action costs.
Ans: c. implicit costs.
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The Fed ________ intervene in the foreign exchange market by supplying dollars and the Fed ________ intervene in the foreign exchange market by demanding dollars
A) can; can B) cannot; can C) can; cannot D) cannot; cannot
All externalities:
A. are harmful to society and create costs external to the decision maker. B. are beneficial to society and create benefits external to the decision maker. C. create either a cost or benefit to a person other than the person who caused it. D. are addressed by the government through taxation.
Which of the following is an example of an indirect tax?
a. value-added tax b. income tax c. inheritance tax d. head tax
An analysis of market failure and government failure indicates
a. government decision making is always preferable to using markets. b. market decision making is always preferable to public-sector action. c. government action is necessary whenever market failure occurs. d. both the market and the government may fail to meet conditions of economic efficiency; in each individual case, the choice of market or public-sector action requires careful evaluation.