The concept of opportunity cost exists because
A. the value of services is hard to determine.
B. shortages occur.
C. goods have different prices.
D. resources are scarce.
Answer: D
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Nervous Norman holds 70% of his assets in cash, earning 0%, and 30% of his assets in an insured savings account, earning 2%. The expected return on his portfolio
A) is 0%. B) is 0.6% C) is 1%. D) is 2%. E) cannot be determined without knowing what the dollar value of his assets is.
It makes sense for Wendy's to advertise its new menu that allows customers to choose fruit or salad as a substitute for French fries in its values meals, as long as doing so raises:
A. revenue by less than the cost of advertising. B. costs. C. revenue by more than it raises the cost of advertising. D. any revenue at all.
The joining of firms that are producing or selling a similar product is
A) a conglomerate merger. B) a horizontal merger. C) a vertical merger. D) always an illegal merger.
A decrease in demand, with supply constant, results in a(n)
a. increase in equilibrium price and a decrease in equilibrium quantity b. decrease in equilibrium price and a decrease in equilibrium quantity c. increase in equilibrium price and an increase in equilibrium quantity d. increase in equilibrium price and an ambiguous effect on equilibrium quantity e. decrease in supply