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 cost
A ticket to a concert costs $45. You have a ticket and can resell it for $75. Your opportunity cost of actually attending the concert is
The law of comparative advantage indicates that:
a. a group of people will reduce their output when each good or service is supplied by the low opportunity cost producer.
b. trading partners lose when they can acquire a good through trade cheaper than they can produce it.
c. trade is most effective when people trade only among those in their own nation.
d. a group of people can increase their output when each good or service is supplied by the low opportunity cost producer.
According to the law of comparative advantage, a particular task is performed most efficiently by the individual with the lowest:
a. wage rate.
b. tax liability.
c. net worth.
d. opportunity cost.
The curve that shows the relationship between the price of a good and the quantity that consumers are willing to purchase at each price is the
a. supply curve.
b. demand curve.
c. production possibilities curve.
d. consumption curve.
Assume the demand curve for cookies is downward sloping. If the price of cookies falls from $1.50 to $1.25 per dozen,
a. the demand for cookies will fall.
b. the demand for cookies will rise.
c. a larger quantity of cookies will be demanded.
d. a smaller quantity of cookies will be demanded.
If a large percentage increase in the price of a good results in a small percentage reduction in the quantity demanded of the good, demand is said to be
b. relatively inelastic.
c. relatively elastic.
d. income proof.
The price elasticity of demand for a commodity is determined primarily by the
a. size of the consumer surplus.
b. availability of good substitutes for the good.
c. incomes of consumers.
d. availability of complementary goods.
In the textbook market, a rise in consumer income, other things being equal, will cause
a. the demand curve for textbooks to shift to the left.
b. the demand curve for textbooks to shift to the right.
c. a downward movement along the demand curve for textbooks.
d. an upward movement along the demand curve for textbooks.
According to the law of supply,
a. producers are willing to supply larger amounts of a good as its price increases.
b. a direct relationship exists between the price of a good and the amount buyers choose to buy.
c. an inverse relationship exists between the price of a good and the amount buyers wish to buy.
d. an inverse relationship exists between the price of a good and the amount producers supply.
f the supply of a good is relatively inelastic, this means that the quantity supplied of the good is
a. not very sensitive to the price of the good.
b. highly sensitive to the price of the good.
c. unrelated to the price of the good.
d. none of the above.
A shortage occurs whenever
a. quantity demanded exceeds quantity supplied at the equilibrium price.
b. price is less than equilibrium price.
c. quantity demanded is less than quantity supplied.
d. goods are scarce.