Jody has purchased a non-refundable $75 ticket to attend a Miley Cyrus concert on Friday night. Subsequently, she is asked to go to out dinner at no expense to her. If she uses cost-benefit analysis to choose between going to the concert and going out to dinner, the opportunity cost of going out to dinner should include:
A. neither the cost of the ticket nor the entertainment value of the concert.
B. the cost of the ticket plus the entertainment value of the concert.
C. only the cost of concert ticket.
D. only the entertainment value of the concert.
Answer: D
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Suppose that when the price of oranges decreases, Sarita decreases her purchases of peaches. To Sarita,
A) oranges and peaches are normal goods. B) oranges and peaches are substitutes. C) oranges and peaches are complements. D) oranges and peaches are inferior goods.
A student has a chance to see Taylor Swift in concert. The student also has a major economics exam in the morning. If the student goes to the concert: a. she may receive a lower grade on the economics exam
b. the opportunity cost of the concert includes the value of the time that would otherwise have been spent studying. c. the decision involves a tradeoff. d. all of the above are correct.
Deflation is defined as
A. a decrease in the inflation rate. B. a fall in the average price level. C. a period during which the average price level is low. D. a low rate of change in average prices.
The time cost incurred by consumers who must find substitute products after a ban is placed on some good or service is an example of a(n)
a. capital cost d. operating expense b. fixed cost e. implicit cost c. explicit cost