Suppose you have purchased a non-refundable plane ticket and, at the last moment, you cannot take the trip. You can, however, sell the ticket. If you paid $700 for the ticket, the cost of sending the ticket to someone through overnight mail is $20, and you spend $10 on a courier to get the ticket to the post office for overnight delivery, what is the minimum you should accept for the ticket?
a. $700 because that is what the ticket cost.
b. $720 because that is the cost of the ticket and of getting it to the buyer.
c. $730 because that is the total cost of the ticket and getting it to the buyer.
d. More than $730, so that you can make a profit.
e. $30 because the $700 is a sunk cost.
E
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A person has a comparative advantage in producing a good if that person:
a. can produce the good at a lower absolute cost than anyone else. b. can produce the good at a lower opportunity cost than anyone else. c. can do a better job than anyone else. d. spends more money in out-of-pocket expenses than anyone else. e. can produce the good at a higher opportunity cost than anyone else.
Every Friday night Elizabeth either goes bowling or goes to the movies. Because the price of bowling went up, Elizabeth now sees more movies. Elizabeth's behavior would be best described as a change in which determinant of demand?
a. Price of complementary goods b. Expectations c. Income d. Number of buyers e. Price of substitute goods
If a price ceiling is not binding, then
a. there will be a surplus in the market. b. there will be a shortage in the market. c. the market will be less efficient than it would be without the price ceiling. d. there will be no effect on the market price or quantity sold.
An example of a fungible commodity is:
A. gold. B. oil. C. aluminum. D. All of these are fungible commodities.