The idea of opportunity cost is relevant
A. only in consumption decisions.
B. only in production decisions.
C. only in financial decisions.
D. in almost any kind of decision.
Answer: D
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What are the three factors that define a household budget constraint. Explain
What will be an ideal response?
The relationship between consumption and disposable income is such that:
A. an inverse and stable relationship exists between consumption and income. B. a direct, but very volatile, relationship exists between consumption and income. C. a direct and relatively stable relationship exists between consumption and income. D. the two are usually equal.
The total revenue test says i. Demand is elastic if a decrease in price results in an increase in total revenue. ii. Total revenue is maximized when demand is elastic. iii. Total revenue is minimized when demand is unit elastic
A) i only B) i and ii C) ii and iii D) i, ii and iii E) ii only
A characteristic of an efficient market is that
A) prices are equal for all securities. B) bid-asked spreads are large. C) prices reflect all available information. D) all investors receive a positive rate of return.