Do all valuable items have price tags?
A. No, because some valuable items have no opportunity cost.
B. Yes, because everything has its price.
C. Yes, because price is the measure of opportunity cost.
D. No, some have no explicit price on them.
E. Yes, because only items that can be sold in markets have value.
Answer: D
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In the case of national defense protection, ________ is a better policy than protection
A) a production subsidy combined with free trade B) an income tax C) direct government provision of infrastructure D) None of the above is better
If Japan gives up ten bushels of rice to produce one bicycle, while the United States gives up five bushels of rice to produce one bicycle, then:
a. the opportunity cost of producing bicycles in the United States is higher than in Japan. b. Japan has a comparative advantage in the production of bicycles. c. the United States has an absolute advantage in the production of rice. d. total output will be highest if the United States specializes in rice and Japan specializes in bicycles. e. total output will be highest if Japan specializes in rice and the United States specializes in bicycles.
Making rational decisions "at the margin" means that people
a. make those decisions that do not impose a marginal cost. b. evaluate how easily a decision can be reversed if problems arise. c. compare the marginal costs and marginal benefits of each decision. d. always calculate the dollar costs for each decision.
A student that asks interesting questions during the lecture generates
A) positive externalities. B) no externalities. C) negative externalities. D) an excludable good.