Explain why a relative price is an opportunity cost
What will be an ideal response?
A relative price is the ratio of the price of one good or service to the price of another good or service. It tells us how much of one good or service must be given up in order to obtain more of the other good.
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Refer to Figure 16-3. Suppose Chantal charges all her customers a uniform price of $10 for a haircut. Which of the following statements is true?
A) Chantal is maximizing revenue in market B. B) Chantal is selling more than the profit-maximizing quantity of haircuts in market B. C) Chantal is selling less than the profit-maximizing quantity of haircuts in market B. D) Chantal will earn a greater profit through uniform pricing than if she practices price discriminates.
How do we determine whether a firm has maximized profits?
What will be an ideal response?
From 1973 to the early 1990s, U.S. productivity _______, and since the early 1990s, U.S. productivity _______.
A. rose; rose B. fell; fell C. rose; fell D. fell; rose
In the classical view, if desired saving exceeds desired investment
A. the interest rate would decline. B. government spending must fall. C. the interest rate would increase. D. government spending must rise.