John gave up a night of pizza with friends to study for his calculus exam. He is illustrating which concept?
a. The Time Value of Money
b. Opportunity Cost
c. Sunk Cost
d. Comparative Advantage
b
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Molly received an autographed poster of David Hasselhoff for her 21st birthday
Her friend Helga offered her $50 for the poster, but Molly refused to sell the poster even though she knows she would never pay that much to replace it if it was ever damaged or destroyed. Explain this inconsistency in Molly's behavior.
Goods that cost 1/5 of one dollar in the U.S. cost one kroner in Denmark, the real exchange rate would be computed as how many Danish goods per U.S. goods?
a. five b. the amount of kroner that can be bought with twenty U.S. cents c. the amount of kroner that can be bought with 5 dollars d. None of the above is correct.
A monopolist faces a demand curve given by P = 20 - Q and has total costs given by TC = Q2. By using a bit of calculus, you should be able to determine that the firm's marginal revenue is MR = 20 - 2Q and its marginal cost is MC = 2Q. Now suppose that the country in which this monopolist is located decides to engage in international trade. The world price of the product produced by the monopolist is $12. What is its profitmaximizing price?
a. $20 b. $15 c. $12 d. $10
The primary concern of current critics of fiat money is that:
A. fiat money is too easy to counterfeit. B. government will issue too little threatening economic growth. C. fiat money is too costly to produce. D. governments issue too much money threatening its value.