The quantity of one good that is given up to produce another is defined to be its
a. market value
b. opportunity cost
c. relative cost
d. absolute cost
e. nominal cost
B
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Which of the following is an example of the opportunity cost involved with social regulation?
a. The monetary costs of hiring administrative assistants to fill out OSHA safety reports b. The environmental costs of pollution control required under the Clean Air Act c. The monetary costs of laboratory trials required to try out a new drug d. The lives that are lost because new drugs are not introduced quickly e. The monetary cost of manufacturing a life saving drug
The market allocates goods to individuals according to the individuals’
A. desire for the good. B. ability to pay for the good. C. desire and ability to pay for the good. D. political influence.
If a $500 tax is placed legally (statutorily) on the buyers of new couches and as a result the price of couches at stores rises by $200, the actual burden of the tax
a. falls completely on couch buyers. b. falls completely on couch sellers. c. is $200 on couch buyers and $300 on sellers. d. is $300 on couch buyers and $200 on sellers.
The fact that financial intermediaries employ experts to carry out particular activities and so lower transactions costs is usually associated with the following economic concept:
A. economies of scale. B. comparative advantage. C. the law of demand. D. information costs.