Question 1

The Sultan of Brunei,one of the world's richest people,does not face the problem of scarcity.

Accepted Answer

False

Question 2

If you enjoy playing golf,the opportunity cost of cleaning your room

Accepted Answer

B

Question 3

Opportunity cost is objective;therefore,its value does not change as circumstances change.

Accepted Answer

Opportunity cost is subjective and can vary based on individual preferences and circumstances.

Question 4

Your opportunity cost of choosing a particular activity

Accepted Answer

Opportunity cost is the cost of the next best alternative that must be forgone in order to pursue a certain action. It varies depending on the time and circumstances because the options available and their associated costs can change over time.

Question 5

Which economic concept does the expression "time is money" reflect?

Accepted Answer

The expression "time is money" reflects the concept of opportunity cost, which means that the cost of any decision is the next best alternative that must be given up. In this case, the opportunity cost of using time to do one thing is the potential money that could have been earned by using that time to do something else. Therefore, the expression suggests that time should be used efficiently to maximize potential earnings.

Question 6

Suppose you have an hour before your next class starts.You can either read a book,get something to eat,or take a nap.The opportunity cost of getting something to eat is

Accepted Answer

The answer of Suppose you have an hour before your...

Question 7

A rational decision maker engages in an activity if that activity is more attractive than the best alternative.

Accepted Answer

This statement is consistent with the rational choice theory, which assumes that individuals make choices based on their preferences and the options available to them, and that they choose the option that offers them the most utility (satisfaction or benefit) compared to the available options.

Question 8

Opportunity cost is always measured in dollar terms,rather than in terms of real goods and services.

Accepted Answer

While opportunity cost can be measured in dollars, it can also be measured in terms of real goods and services that could have been produced or consumed with the resources used for a particular decision.

Question 9

Melissa is a self-employed lawyer who chooses a higher-priced restaurant 2 miles from home over a cheaper restaurant 15 miles from home.Which of the following is the most likely explanation for her behavior?

Accepted Answer

The answer of Melissa is a self-employed lawyer who chooses...

Question 10

Opportunity cost exists because

Accepted Answer

Opportunity cost exists because resources are scarce but wants are unlimited. This means that in order to satisfy one want or need, we must forgo the opportunity to satisfy another want or need. This is the essence of opportunity cost.

Question 11

The opportunity cost of an activity is best measured

Accepted Answer

The opportunity cost of an activity is the value expected from the best alternative that is forgone. This means that we measure the cost not just in terms of the monetary costs, but also in terms of the value of the best alternative that we could have chosen instead. Therefore, choice D is the best option.

Question 12

Opportunity cost is defined

Accepted Answer

Opportunity cost is the value of the best alternative not chosen. So, the correct answer is C.

Question 13

Congratulations,you have been admitted to the Blue-and-Blue College.Your annual expenses are as follows: $19,000 for tuition,$1,000 for fees and books,and $4,000 for room and board.You are also receiving a scholarship of $7,500.The next best alternative to going to college is to get a full-time job that pays $24,000 a year (after taxes).What is your opportunity cost of going to college?

Accepted Answer

The total expenses for attending Blue-and-Blue College (after subtracting the scholarship) are $19,000 + $1,000 + $4,000 - $7,500 = $16,500. 
Therefore, the opportunity cost of going to college is the income forgone by not pursuing the next best alternative, which is a full-time job that pays $24,000 after taxes. 
The opportunity cost is calculated as follows: 
Opportunity cost = Income from next best alternative - Income from chosen option 
Opportunity cost = $24,000 - $16,500 
Opportunity cost = $7,500

Therefore, the opportunity cost of going to college is $7,500.

Question 14

The term opportunity cost suggests that

Accepted Answer

The term opportunity cost refers to the cost of a forgone opportunity or the next best alternative that is given up in order to pursue a certain action. This is because resources are scarce and a choice must be made between alternatives. Therefore, in order to obtain something, an individual must give up something else, which is the basic concept of opportunity cost.

Question 15

Opportunity cost is the difference between the benefits and the costs of a choice.

Accepted Answer

The answer of Opportunity cost is the difference between the...

Question 16

A test was scheduled for Monday morning,but you went to a party on Saturday night.If you hadn't attended the party,you could have studied for the test or gone to a movie.Which of the following is true?

Accepted Answer

The answer of A test was scheduled for Monday morning,but...

Question 17

The opportunity cost of an activity is

Accepted Answer

The opportunity cost of an activity is the value of the best alternative not chosen. Therefore, the best choice is C.

Question 18

The opportunity cost of a particular activity

Accepted Answer

The answer of The opportunity cost of a particular activity
...

Question 19

The opportunity cost of an activity

Accepted Answer

Opportunity cost is subjective and varies from person to person based on individual values and opinions. Therefore, the best choice will depend on each individual's unique circumstances and priorities.

Question 20

You can either go to see a movie with your friends or go to the library and study for tomorrow's Economics test.Usually,you enjoy going at the movies just as much as you enjoy studying for Economics.However,tomorrow's test will determine your final grade and you need an A for the class,otherwise you'll be losing your scholarship.Which of the following is correct?

Accepted Answer

The opportunity cost of going to see the movie is high because if you don't study, you'll fail the class and lose your scholarship. In other words, the cost of missing out on the movie is not as high as the cost of losing your scholarship. Therefore, the best choice is to study for the economics test.

Quiz 2: Economic Tools and Economics Systems