You have the option of consuming one can of soda or two cookies or three oranges. You picked the can of soda. Therefore the opportunity cost of this can of soda is
A) the price of the can of soda.
B) the difference in the prices of these three products.
C) the price of the cookies as they are not usually consumed with soda.
D) either the cookies or the oranges, whichever you like more.
Answer: D
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Loss aversion refers to the idea that:
A) people generally tend to avoid risky activities. B) people are more prone to making losses than gains in day-to-day transactions. C) people psychologically weight a loss more heavily than they psychologically weight a gain. D) people are unwilling to undertake expenditures that reduce the probability of future losses.
Bank A and Bank B both have required reserve ratios of 10 percent. Bank A receives a new deposit of $300,000 and uses the resulting excess reserves to make a loan to Oshra, who uses it to buy a new house from Seanan. Seanan deposits the money he received from Oshra into Bank B, which then uses all its new excess reserves to make a loan to Terrance. How much money was loaned to Terrance?
a. $30,000 b. $28,300 c. $270,000 d. $243,000
The CEO of Coffman Enterprises wants to export products to foreign markets. However, top executives at Coffman are concerned that the firm will face fierce competition from foreign rivals because Coffman lacks significant core competencies. The executives are most likely worried that Coffman lacks ________.
A) capital advantages B) internalization advantages C) location advantages D) ownership advantages
Suppose that the Australian economy initially uses 50 billion hours of labor to produce $5 trillion of real GDP. If 50 billion more hours are employed and Australia's real GDP increases by $4 trillion more,
A) Australia's production function exhibits diminishing returns. B) Australia's production function exhibits increasing returns. C) Australia has an Okun Wedge of $1 trillion. D) Australia has positive Lucas Wedge. E) Australia's production possibility frontier has a positive slope.