A hospital receives a large donation and wants to use the funds to buy a new CT scanner. What is included in the opportunity cost of the new CT scanner?
a. There is no opportunity cost because the money was a gift.
b. The foregone benefits of a new CT scanner if the funds are diverted to its purchase.
c. The cost of the same CT scanner last year.
d. The remaining depreciation expense on the CT scanner the hospital is replacing
b. The foregone benefits of a new CT scanner if the funds are diverted to its purchase
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A large increase in oil prices is an example of:
A. inflation inertia. B. an adverse inflation shock. C. a favorable inflation shock. D. excessive aggregate spending.
According to Malthus, how do economic growth and population relate to each other?
Which of the following is an imperfection of market economies?
a. They produce inexpensive services but expensive manufactured goods. b. They place undue importance on the needs of future generations. c. They cannot provide certain goods such as national defense. d. They distribute income too unequally.
In monopolistic competition, a firm has a limited degree of "price-making" ability. This means that the firm will
A. set price above marginal cost. B. set price equal to marginal cost. C. always earn an economic profit. D. produce at minimum average total cost.