Which of the following is NOT true of opportunity cost?
a. Opportunity costs are subjective because they depend upon how the decision-maker values his or her options.
b. Opportunity costs are only the monetary costs of lost options.
c. Opportunity costs are the highest-valued alternative sacrificed in order to choose an option.
d. Only the decision-maker can determine his or her opportunity costs for any particular action.
B
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List factors that increase the price elasticity of supply
What will be an ideal response?
Suppose residents of Toadhop live on the Quabache River, a river prone to flooding. Suppose there are 1000 (type A) people who value flood control more than the 1000 (type B) people. Type A Demand QD = 100 ? P Type B Demand QD = 50 ? P Where Q measures the quality of flood control. If the price of a unit of flood control is $100,000 and the citizens of Toadhop gather for a townhall meeting to
find the socially optimal level of flood control, and they are successful, they will pick Q equal to a. 0 b. 10 c. 25 d. 70
The deadweight loss of an income tax is determined by the
a. amount of total tax revenue to the government. b. marginal tax rate. c. average tax rate. d. ability-to-pay principle.
A firm is unlikely to hire a worker if:
A. there are diminishing marginal returns to labor. B. the minimum wage set by law is less than the equilibrium wage in the market. C. the additional revenue generated by hiring the worker is less than his or her wage. D. the additional output a firms gets by hiring the worker is greater than his or her wage.