Opportunity cost can best be defined as the
A. value of what must be given up in order to acquire an item.
B. money cost to the buyer to acquire a good or service.
C. total value of all the other items that otherwise could be acquired.
D. cost to the seller to produce an item.
E. time cost to obtain the money to buy an item.
Answer: A
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Which of the following is the best example of a transactions cost?
A) the value of the time spent negotiating a contract B) the price of a new set of tires C) the cost associated with producing a golf club D) the price of labor and materials used to produce a house E) the price of food
A Purchasing Manager's Index below 50 indicates
A) a declining retail sector. B) a downturn in economic activity. C) an increase in bond prices in the near future. D) a declining manufacturing sector.
Which of the following trends is most likely the result of an expansionary monetary policy?
a. The demand for both costume jewelry and expensive jewelry rises. b. The demand for both economy cars and luxury cars drops. c. The demand for fast food drops, but the demand for gourmet food rises. d. The demand for cheap concert seats rises, but the demand for expensive seats drops.
The public interest theory of regulation stipulates that government regulation of a natural monopoly is necessary in order to achieve the following, except:
A. Preventing the natural monopoly from harming society through its monopoly pricing B. Garnering for society at least part of the cost reductions from being a natural monopoly C. Avoiding the reduction in output associated with monopoly power D. Eventually breaking up the monopoly to achieve competition within the industry