2. Which of the following is correct about opportunity cost? It is the value of
ID: 1135671 • Letter: 2
Question
2. Which of the following is correct about opportunity cost?
It is the value of the best opportunity forgone in a particular choice.
It is not a real cost, so we do not need to consider it when making decisions.
It is the price at which you buy some item.
It is usually less than the amount of money spent on some choice.
3. In general, if a reduction in the price of one good increases the demand for another, the two goods are called ________?
complements
free goods
substitutes
4. Which of the following is the worst example, among the four, of a choice at the margin regarding water consumption?
Should we use more water to brush our teeth?
Should we consume water or not?
Should we take shorter showers?
5. Every economy must answer some fundamental questions. Which one of the following is NOT one of them?
How should goods and services be produced?
What should be produced?
At what price should goods be sold?
6. Which of the following statements is correct about a free good in economics?
The cost of it is less than the benefit one can get from it.
The cost of it is zero.
The choice of one use of it does not require that we give up another.
7. When supply and demand both increase, which of the following is certain to happen?
Equilibrium price increases.
Equilibrium quantity decreases.
Equilibrium quantity increases.
8. When the supply curve shifts to the right, what is least likely to happen?
Equilibrium price increases.
There is an increase in supply.
Equilibrium quantity increases.
9. A decrease in supply can be visualized on the graph by shifting the supply curve to the ________
left
right
down
10. Which of the following statement is incorrect?
Capital can be used to produce other goods.
Capital cannot be money.
Capital can be financial assets.
11. Which of the following is least likely to result in the formation of human capital?
Education
Experience
Training
Luck
12. In assuming that people pursue their self-interest, economists are
assuming that people are selfish.
assuming that people pursue satisfaction that cannot be simply measured by money.
most likely wrong.
(I know you are only suppose to anwer 1 or 2 question, but this was my last question, please help)
Explanation / Answer
Ans 2. (D) The opportunity cost is the cost of next best alternative activity forgone.
Ans 3. (A) Complement goods because they are used together.
Ans 4. Only 3 choices are given, so option 1 is the worst example
Ans 5. (C) At what price it must be sold because that can be determined by the market forces of demand and supply.
Ans 6. (B) The cost is zero
Ans 7. Equilibrium quantity increases.
Ans 8. A rightward shift in supply means there is an increase in the supply and equilibrium quantity also rises.
Ans 9. Left
Ans 10. (B) Capital cannot be money is wrong statement
Ans. 11 (D) Luck
Ans 12. (B)
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