Opportunity cost is best defined as:
a. the sum of all alternatives given up when a choice is made.
b. the money spent once a choice is made.
c. the highest-valued alternative given up when a choice is made.
d. the difference between the cost price and the selling price of a good.
e. the cost of capital resources used in the production of additional capital.
c
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Which of the following goods is likely to have the most elastic demand curve?
a. Tobacco products. b. Gasoline. c. Medical care. d. Honda automobiles.
Monopolies use their market power to
a. charge prices that equal minimum average total cost. b. increase the quantity sold as they increase price. c. charge a price that is higher than marginal cost. d. dump excess supplies of their product on the market.
Which of the following situations is used as a justification for government?
A) negative externalities B) removal from the prisoner's dilemma C) nonexcludable goods D) positive externalities E) all of the above
The "miracle" of the market, as addressed in your text, refers to the countless goods and services of great complexity made abundantly available
A) under conditions of massive ignorance. B) with a minimum number of errors and mistakes. C) with few losses and bankruptcies. D) with no systematic or scientific way of explaining how it happens.