The opportunity cost for a student of attending college for a year is measured by
A. the benefit received by the student.
B. the tuition paid for the year.
C. the value of the most valued opportunity foregone by attending college.
D. the total money outlays associated with attending college.
C. the value of the most valued opportunity foregone by attending college.
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Cost minimization suggests that two inputs should be employed to the point where
A) the marginal cost of each input is identical. B) the marginal revenue product of each input is identical. C) the marginal physical product per dollar spent on each input is identical. D) the extra contribution to physical output of the inputs is identical.
An example of an explicit cost of production is: a. the cost of foregone labor earnings for an entrepreneur
b. the cost of flour for a baker. c. the foregone rent that could have been earned if land owned by a firm was not used as its parking lot. d. provided by none of the above.
Milk costs $2 and the last unit provides $4 in marginal utility. Cheese costs $4 and the last unit provides $2 in marginal utility. Is this an efficient allocation of resources? If so, why? If not, why not?
What will be an ideal response?
Suppose Jack Weldon came up with a novel idea of making lamps out of recycled automobile tires. His firm, No-Skid Lamps, works three shifts a day trying to keep up with demand. Attracted by its success, other firms copy the idea and produce similar lamps. As a result, No-Skid Lamps' demand curve
a. shifts to the right and becomes more inelastic b. shifts to the right and becomes more elastic c. shifts to the left and becomes more inelastic d. shifts to the left and becomes more elastic e. stays the same