Opportunity costs is -The money a business loses

Opportunity costs is -The money a business loses

1. Opportunity costs isa. The money a business loses in a bad investmentb. The value of the best foregone opportunityc. The price an individual pays for making a mistaked. Opportunity knocks but once; if you miss your chance will never come again2. Which of the following is an example of diminishing marginal utility.a. You give up donuts on your diet.b. You like one donut with your coffee, but not two.c. You buy more donuts when the price of coffee risesd. You cut back on donut after your pay cut.3. Suppose there is a drought in California damaging orange grovesa. price will increase quantity will increaseb. price will decrease quantity will decreasec. price will decrease quantity will increased. price will increase quantity will decrease4. Which is an example of the substitution effect in demand?a. The price of coffee rises, so you buy less coffeeb. The price of coffee rises, so you buy more coffeec. The price of coffee rises, so you buy more tea and less coffeed. The price of coffee rises, so you buy less tea and more coffee5. All of these influences supply excepta. Prices of inputsb. Expected future pricesc. Extent of competition in the marketd. Use of fiat money6. Markets are inefficient whena. Buyers and sellers have perfect informationb. Buyers and sellers are free to enter and exitc. A small number of sellers coordinate products and pricesd. Buyers and sellers act independently to pursue their own self- interests7. Of the following examples which is not an example of a principle-agent incentive problema. Banks bundle mortgage loans and offer collateralized debt obligations to pensionfundsb. A company’s chief executive officer takes action to merge with another firm so stockprices can rise in the short runc. A cashier purposely forgets to ring up a sale and does not give the customer areceiptd. A baseball player who does not pay his sports agent8. Price discrimination is a situation where a producera. Charges different prices in a different marketb. Charges the same price in different marketc. Colludes with other companies on setting prices I all marketsd. All of the above9. Which of the following situations is NOT an example of how imperfect information affects amarket?a. A healthy person with a know family history of a disease takes out a large lifeinsurance policy.b. A used-car buyer looks up the free history report on an auto before purchasing it.c. A doctor orders a series of medical tests at his clinic to rule out alternativediagnoses.d. Travelers choose to stop at McDonalds for a Big Mac and milkshakes, rather thanBob’s real home cooking.10. Which of the following products is least likely to be sold in a monopolistic competitivemarket?a. Video gamesb. Internet servicec. Beerd. Cotton11. Which of the following is an example of the rule of lawa. Jane Ramos invents a new smart phone and is able to patent itb. An American farmer contracts with a landowner to rent additional land to grow cornand wheat.c. A foreign investor buys an American beer company and renovates one of three U.S.plantsd. A government official wants compensation to allow an immigrant to stay in the UnitedStates12. Which of the following would be excluded from 2014 GDP? The sale ofa. 2014 Honda made in Tennesseeb. Haircutc. A realtor’s services in selling a housed. A home built in 2012 and first sold in 201313. The price of bonds and the interest rate area. Not relatedb. Positively relatedc. Negatively relatedd. Sometimes positively related and other times negatively related depending on thebond payments.14. As the interest rate falls, people hold ____ money instead of bonds because the opportunitycost of holding money hasa. More; fallenb. More ; risenc. Less; fallend. Less; risen15. Which of these situations describes a foreign (non-$) currency that is overvalued?a. A Big Mac in Mexico costs 6 pesos and a big Mac in the U.S. costs $3.00. theexchange rate is 3 pesos per dollar.b. A cheese pizza in Rome costs 18.2 euros, and $14 dollars in the U.S. the exchangerate is 1.30 euros per dollarc. A cheese pizza in Rome costs 14 euros and $14 dollars in the U.S. the exchangerate is 1.30 euros per dollard. Nike basketballs shoes cost 45 remnimbi in China and $7 in the U.S. The exchangerate is 6 remnimbi per dollar.16. In a market economy, the ideal solution to the problem of externalities would be to:a. Prohibit all production involving spillover costs.b. Regulate both the amount people may consume and the price they pay for goodswhose production involves spilloverc. Charge or tax producers so that the price of a good reflects the true social cost of theexternality generated ind. Allow producers to produce the output level where both the marginal private benefitand the marginal private cost equal the price.17. Expansionary monetary or fiscal policy would most likely be effective in reducing which typeof unemployment?a. Frictional unemploymentb. Cyclical unemploymentc. Structural employmentd. Discouraged workers18. Which of the following describes the inflation unemployment trade off?a. Monetary policies that expand the money supply and lower interest rates will raiseinflationb. Monetary policies that expand the money supply and raise interest rates will lowerinflationc. Fiscal policies that increase government spending and lower unemployment willcause deflationd. Fiscal policies that increase government spending will increase unemployment andlower inflation


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