1. The opportunity cost of getting an MBA at University includes the time you gi

Question

1.       The opportunity cost of getting an MBA at University includes the time you give up to prepare for exams. (True or False) Why?

2.       For hypothesis to be called scientific, it has to be conceivable that it can be shown to be false. (True of False) Why?

3.       The model of perfect competition assumes that any individual buyer or seller can affect market price. (True or False) Why?

4.       IF the demand for heroin is price elastic, a reduction in the availability of heroin due to increased law enforcement efforts will increase total expenditures on heroin. (True or False) Why?

5.       If the price of pizza goes up by 10% and the quantity demanded of pizza decreased by 4%, we can conclude that pizza is inelastic in this segment of the demand curve. (True or False) Why?

Explanation / Answer

1. True (Because in that time you can do something alternate to improve your utility)

2. True (For a hypothesis to be scientific, it has to be both testable & Falsifiable)

3. False (Buyers and Sellers are price takers in a perfect competition)

4. False (when demand is elastic, on increasing price, which in this case is true because law enforcement will lead to difficulty in getting the drug & hence, higher prices, therefore on increasing price revenues will decline since demand decreases.)

5. True (Because a 10% change in price is only affecting quantity demanded by 4% hence, Elasticity is less than 1 which implies an inelastic demand.)

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