Which one of the following expressions best states the idea of opportunity cost?
A. "A penny saved is a penny earned."
B. "He who hesitates is lost."
C. "There is no such thing as a free lunch."
D. "All that glitters is not gold."
Answer: C
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If higher inflation ensues from a temporary negative supply shock, and in response, the central bank raises interest rates, then the resulting decrease in AD will return inflation back to its original level ________
A) and no further action will be required by the central bank B) but the ensuing positive output gap will lead to higher inflation once again so further interest rate increases will be required by the central bank to return inflation back to its long run level C) but the ensuing negative output gap will lead to short-run increases in AS and the central bank will have to "undo" its original interest rate hike in order to return inflation back to its target rate D) all of the above E) none of the above
Between 1965 and 1972, eight major pieces of consumer-protection legislation were enacted. This burst of legislative activity was largely driven by
a. increased public fears following the thalidomide tragedy. b. public outcry following a series of steamboat explosions. c. a general lack of faith in the market. d. widespread support for the "Reagan Revolution.".
The sum of the marginal propensity to consume (MPC) and the marginal propensity to save (MPS) always equals:
A. 1. B. 0. C. the interest rate. D. the marginal propensity to invest (MPI).
Assume the following exchange rates for today: $1=140 yen and 1 Danish krone = $0.10. We can conclude
A. 1 kr. = 14 yen. B. 1 kr. = 28 yen. C. 1 yen = 14 kr. D. 1 yen = 280 kr.