You are shopping at the local mall with an $80 gift certificate. Only three items catch your attention. The items include a Justin Bieber sheet set, a remote control helicopter, and an "Amazing Ab Belt." You would be willing to give up $60 for the sheets, $70 for the belt, and $80 for the helicopter. Knowing this, you decide to purchase the helicopter. The opportunity cost of the helicopter was:
A. $130, the combined value of the alternatives forgone.
B. $80, the amount of the gift certificate spent.
C. $70, the value of the ab belt.
D. $60, the value of the sheets.
C. $70, the value of the ab belt.
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Assume that the graphs show a competitive market for the product stated in the question below.
Select the graph that best shows the change in the market following a reduction in the tax placed on the buyers in the market.
A. graph (1) B. graph (2) C. graph (3) D. graph (4)
Keith is a perfectly competitive carnation grower. The market price is $2 per dozen carnations. Keith's average total cost to grow carnations is $2.50 per dozen. In the long run, Keith will
A) raise his price to more than $2.50 per dozen carnations. B) raise his price to $2.50 per dozen carnations. C) exit the industry if the price and his costs do not change. D) incur an economic loss. E) continue to make an economic profit.
One problem with measuring a durable good's cost is
A) how to allocate the initial purchase cost. B) how to account for depreciation of the good. C) that the good may break before the end of its estimated useful life. D) when to decide to throw it away for a newer model even if the cost has not been accounted for.
Refer to Figure 8.4. If three microwave ovens are produced, average variable costs are A) $166.67. B) $333.33. C) $500. D) $1,500.