Economists argue that:
a. accounting costs consider all types of costs including implicit costs
b. there is an opportunity cost associated with all decisions.
c. economic decisions do not have opportunity costs but other decisions do.
d. economic decisions should consider sunk costs
b
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In the market for reserves, if the federal funds rate is above the interest rate paid on excess reserves, then an open market ________ the supply of reserves, raising the federal funds interest rate, everything else held constant
A) sale decreases B) sale increases C) purchase increases D) purchase decreases
To economists, which of the following literally means the same thing as an outflow of financial capital?
a. trade surplus b. trade deficit c. current account surplus d. current account deficit
The government prefers a market-based approach to reduce firms' emissions of a toxic gas but wants to make certain that no more than 1,000 cubic yards of the gas are ever emitted in a single day. The most efficient policy under these circumstances is likely to be a system of
a. per-unit taxes on emissions of the gas. b. per-unit taxes on the goods produced by firms that emit the gas. c. subsidies to firms that agree not to emit the gas. d. sales of permits to emit specified quantities of the gas on specified days.
The free-rider problem arises when people:
A. who pay for a good cannot consume it. B. who do not pay for a good cannot consume it. C. obtain a good for less than the market equilibrium price. D. who do not pay for a good cannot be excluded from consuming it.