You paid $35 for a ticket (which is non-refundable) to see SPAM, a local rock band, in concert on Saturday. Assume that $35 is the most you would have been willing to pay for a ticket. Your boss called, and she is looking for someone to cover a shift on Saturday at the same time as the concert. You would have to work 4 hours and she would pay you $11/hr. The psychic cost to you of working is $2/hr. What is your opportunity cost of going to work on Saturday?
A. $0
B. $9
C. $36
D. $35
Answer: D
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Barter is an inefficient means of exchange because
A) barter transactions require a double coincidence of wants. B) barter only occurs in relatively primitive economies. C) demand will not necessarily equal supply. D) in a barter transaction only one party needs to want what the other party has to sell.
Insurance companies create wealth by
a. reducing the amount of risk that the risk averse must bear b. reducing the amount of risk that risk lovers must bear c. increasing the amount of risk that the risk averse must bear d. increasing the amount of risk that risk lovers must bear
Workers who deal with information are generally referred to as
A) non-productive workers. B) production workers. C) knowledge workers. D) migrant workers.
The bequest effect tends to
A. cause an increase in savings. B. cause a decrease in savings. C. cause people to retire early. D. cause people to retire later.