Each seller's opportunity costs are:
A. determined by a number of factors, including monetary considerations.
B. determined by a number of factors, none of which is monetary.
C. determined monetarily, which is why they can never be zero.
D. less than the monetary costs of manufacturing the good or service.
Answer: A
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Smith' s construction of an 8-foot fence around his property will block his neighbor Johnson's scenic view. If Smith constructed a 6-foot fence, Johnson's view would not be blocked. If Johnson values his view at $1,000 and Smith values the extra 2 feet of fence at $500, then a possible resolution is that
a. Johnson makes a side payment to Smith of $750 not to build the fence so high. b. Johnson makes a side payment to Smith of less than $500 not to build the fence so high. c. Smith makes a side payment of $750 to Johnson to live with the fence. d. Smith makes a side payment of over $1000 to Johnson to live with the fence.
Economists refer to the pattern of income that people derive from different factors of production as the:
A. factor price. B. factor distribution of income. C. factor stream of income. D. expected future factor value.
Other things the same, an increase in the U.S. interest rate causes the quantity of loanable funds supplied to
a. rise because national saving rises. b. rise because domestic investment rises. c. fall because national saving falls. d. fall because domestic investment falls.
In general, with a monopolist's outcome, total surplus is:
A. the same as that of a competitive market. B. higher than that of a competitive market. C. lower than that of a competitive market. D. Any of these is possible.