Marissa walks into a convenience store to buy something to drink. As she stares into the cooler, her opportunity cost of choosing a Gatorade is:
A. distant and abstract. It's the value she places on all the other drinks she could choose instead of Gatorade.
B. obvious. It's the value she places on all the other drinks she could choose instead of Gatorade.
C. obvious. It's the value she places on whatever drink she would choose if she didn't pick Gatorade.
D. distant and abstract. It's the value she places on whatever drink she would choose if she didn't pick Gatorade.
Answer: C
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Externalities are costs to society, which have an impact on parties not directly involved into a particular economic transaction.
Answer the following statement true (T) or false (F)
The invisible hand principle indicates that competitive markets can help promote the efficient use of resources
a. only if buyers and sellers really care, personally, about economic efficiency. b. even if business firms fail to produce goods efficiently. c. even when market participants care only about their own self interests rather than about the overall efficiency of resource use. d. if, and only if, businesses recognize their social obligation to keep costs low and use resources wisely.
A commitment problem exists when people cannot achieve their goals because:
A. they do not have the first-mover advantage in a sequential move game. B. they cannot play their dominant strategy. C. they cannot make credible threats or promises. D. the payoff matrix is unknown.
Purchasing a smart phone data plan, premium movie channels, and University of Alabama football season tickets results in you having to drop your health insurance plan. This can be described as:
A. home field advantage B. healthy living C. irrational decision making D. a trade-off