The tendency of opportunity cost to increase as production increases
A. is an example of theory that has not been proven by facts.
B. is a general principle, but not a universal fact.
C. is a universal fact, with no known exceptions.
D. rarely holds in reality, but is a useful theory.
E. cannot be tested with standard economic tools.
Answer: B
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Ed's Electronic Devices has an asset beta of 1.2. The market rate of return is 12% and the risk-free rate of return is 2%. Ed is considering updating his production technology
If he does so, he expects the cash streams indicated in the table below. Given this information, should Ed update his production technology? Year Cashflow Present Value 0 -$100,000 1 $25,000 2 $25,000 3 $25,000 4 $25,000 5 $25,000 6 $25,000 Total
"Other things equal, an increase in supply causes a decrease in price" is a normative statement, not a positive statement
a. True b. False Indicate whether the statement is true or false
Fee-for-service insurance
A. requires you pay for services before they are performed. B. allows patients to pick their own doctor. C. is typically less expensive than an HMO covering the same illnesses. D. has more meddlesome bureaucrats than an HMO.
An unregulated pure monopolist will maximize profits by producing that output at which:
A. P = MC. B. P = ATC. C. MR = MC. D. MC = AC.