Larry was accepted at three different graduate schools, and must choose one. Elite U costs $50,000 per year and did not offer Larry any financial aid. Larry values attending Elite U at $60,000 per year. State College costs $30,000 per year, and offered Larry an annual $10,000 scholarship. Larry values attending State College at $40,000 per year. NoName U costs $20,000 per year, and offered Larry a full $20,000 annual scholarship. Larry values attending NoName at $15,000 per year. Larry's opportunity cost of attending State NoName U is:
A. $15,000
B. $60,000
C. $30,000
D. $20,000
Answer: D
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a. its total costs exceed its revenues. b. its total variable costs exceed its revenues. c. its total fixed costs exceed its revenues. d. it can't earn a positive economic profit.
What does the production possibility curve imply about the resource allocation?
a. Only some points on the curve are efficient. b. All points on the curve are equally efficient. c. A point which lies below the curve is more efficient. d. A point which lies above the curve is readily achievable.
Which term describes the phases of expansion and contraction in an economy over time?
A. Recessions B. Prosperity C. Total product oscillations D. Business cycles
Corporations have a separation and control problem because
A) owners and managers frequently have different incentives. B) most of the profits are reinvested. C) the shareholders control the firm. D) taxes are paid only by the board of directors.