Explain the relationship between opportunity costs and money costs. Can they be treated as identical?
The two costs are usually closely tied because of the way in which a market economy sets prices. If the market functions well, goods that have high opportunity costs will also have high money costs. In turn, goods that have low opportunity costs will also have low money costs. However, it would be a mistake to treat opportunity costs and explicit monetary costs as identical. For one thing, sometimes the market does not function well, and hence assigns prices that do not accurately reflect opportunity costs.
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If supply and demand both increase, the new equilibrium price will be ________ and the new equilibrium quantity will be ________.
A. uncertain; higher B. higher; higher C. lower; lower D. lower; uncertain
Which of the following would not be considered a positive addition to household wealth?
A) a credit card balance B) the balance in your checking account C) 1,000 shares of Microsoft stock D) the equity in one's home
If one job applicant truthfully reveals that they subscribe to an industry publication, the job applicant is
A) using the trade publication as a screening tool. B) using the trade publication as a signaling tool. C) using the trade publication as a form of statistical discrimination. D) using the trade publication for the wrong reasons.
Higher savings usually requires higher interest rates because:
A. higher savings means we expect interest rates to decrease. B. everyone prefers to save more instead of consuming. C. saving requires sacrifice and people must be compensated for this sacrifice. D. of the rule of 72.