The Coffee Nook, a small cafe near campus, sells cappuccinos for $2.50 and Russian tea cakes for $1.00 each. What is the opportunity cost of buying a Russian tea cake?
A) 2 1/2 cappuccinos
B) 2/5 of a cappuccino
C) $2.50
D) $1.00
Answer: B
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Business executives who think the demand for their product is very elastic at the current price are assuming
A) the demand will become less elastic at a higher price. B) they will be able to sell more units at a higher price. C) they will sell fewer units but receive more dollars in sales revenue at a higher price. D) they will sell more units and receive more dollars in sales revenue at a lower price. E) they will sell more units but receive fewer dollars in sales revenue at a lower price.
What does the revenue equivalence theorem state?
What will be an ideal response?
A monopolist currently sells 18 units of a good. If marginal revenue on the last unit sold is $117, then the price of the good must be less than $117
Indicate whether the statement is true or false
Welfare economics is concerned with individual desirability of alternative economic states.
A. True B. False C. Uncertain