A good or service that is forgone by choosing one alternative over another is called a (an):
a. explicit cost.
b. opportunity cost.
c. historical cost.
d. accounting cost.
Ans: b. opportunity cost.
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The demand for apple pies is perfectly elastic. If the government taxes apple pies at $1 a pie, then
A) the seller pays the entire tax. B) the buyer pays the entire tax. C) the seller and the buyer split the tax evenly. D) the seller and the buyer split the tax but the seller pays more. E) who pays the tax depends on whether the government imposes the tax on pie buyers or on pie sellers.
Is the following quote correct? "Here's the law of demand in a nutshell. The lower the price, the higher the quantity demanded, other things constant."
A) Yes, it is totally correct. B) No. It would be correct if it didn't say "other things constant." C) No, because it confuses demand and quantity demanded. D) No, because the law of demand does not apply to nutshells.
A four-firm concentration ratio of 60 percent would indicate the likely presence of oligopoly
Indicate whether the statement is true or false
Refer to the information provided in Figure 3.6 below to answer the question(s) that follow.
?Figure 3.6Refer to Figure 3.6. The number of DVDs Isabel rents per week decreases from 7 to 4. This is caused by
A. an increase in the price of popcorn which is a complement to DVDs. B. a decrease in the streaming price of pay-per-view movies. C. an increase in the rental price of DVDs. D. a decrease in income if DVDs are a normal good.