Moe has a big exam tomorrow. He considered studying this evening, but decided to hang out with Curly instead. If neither activity involves any explicit costs, and Moe always chooses rationally, then it must be true that:
A. Moe gets less benefit from spending time with Curly than from studying.
B. the opportunity cost of studying is greater than the value Moe gets from spending time with Curly.
C. Moe gets more benefit from spending time with Curly than from studying.
D. the opportunity cost of studying is less than the value Moe gets from spending time with Curly.
Answer: C
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In which of the following situations are wages the least likely to be sticky?
A) Unionized workers are in the second year of a three-year labor contract. B) A firm that pays efficiency wages to its employees is experiencing an economic recession. C) A firm has an implicit contract with its employees regarding wages during recessions and expansions. D) A firm hires hourly workers based on changes in the supply and demand for its products.
Compared to the poverty rate for non-Hispanic whites, the poverty rate for Hispanics is almost _______.
Fill in the blank(s) with the appropriate word(s).
Income elasticity of demand reflects
A) the change in total quantity demanded divided by the total change in income. B) the responsiveness of the quantity demanded to changes in income, adjusting its relative price so real income does not change. C) the responsiveness of income of producers to a change in quantity sold of the good. D) the responsiveness of demand to changes in income.
Monopolistically competitive firms
a. are guaranteed to earn short-run economic profit b. may earn short-run economic profits, although long-run economic profit is typically zero c. may earn economic profit both in the short run and in the long run d. earn zero economic profit both in the short run and in the long run e. can only earn an economic profit in the inelastic portion of their demand curves