Steven lives in a big city where there is a shortage of parking. He has a parking spot in his driveway where he parks his car. Which of the following statements is most correct?
A) The opportunity cost of using the spot is zero, because Steven owns the house.
B) Steven has a lower opportunity cost of owning a car than his neighbor, who must rent a parking spot.
C) The opportunity cost of using the parking spot is the price he could charge someone else for using the spot.
D) The opportunity cost depends on how much Steven's mortgage payment is.
C
You might also like to view...
A collusion can work if ________
A) a colluder can cheat without being detected B) a colluder values future monopoly profits more than current profits C) a colluder charges a price higher than his partners D) a colluder gives secret price discounts
If in market equilibrium the marginal social cost of producing a good exceeds the marginal private cost,
a. not enough of the product is being produced b. the price charged for the good is too high c. the good produces a positive externality d. the good produces a negative externality e. the government should produce the good
On average each year, about 7 percent of all firms in the United States are new, and 1 percent go out of business. According to the text, which of the following is not true?
A) Luck may play a role in a firm's performance. B) A focus on quality may have a role in a firm's performance. C) Being a first mover is never a reason for failure. D) Size may be an important factor of success. E) A firm that globalizes may find that it fails.
Accounting profit is equal to
a. marginal revenue minus marginal cost. b. total revenue minus the explicit cost of producing goods and services. c. total revenue minus the opportunity cost of producing goods and services. d. average revenue minus the average cost of producing the last unit of a good or service.