Question 1

Opportunity cost is defined

Accepted Answer

Opportunity cost is the value of the best alternative not chosen. This means that the cost is not simply the value of all alternatives not chosen, but rather the value of the best alternative. Therefore, the best choice would be C.

Question 2

Opportunity cost exists because

Accepted Answer

Opportunity cost exists because resources are scarce but wants are unlimited. This means that in order to obtain one thing, we must give up something else, and the value of what we gave up is our opportunity cost. It has nothing to do with fixed technology, comparative advantage, individual preferences, or efficiency measured by monetary cost.

Question 3

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

Accepted Answer

False

Question 4

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 5

The opportunity cost of an activity is

Accepted Answer

Opportunity cost is the value of the best alternative not chosen. It represents the benefits that could have been gained from the next best alternative that was not chosen. Therefore, option C is the correct answer.

Question 6

The cost of attending college

Accepted Answer

The cost of attending college is not just about monetary expenditures, but also involves the opportunity cost of the most valued alternative that is given up to attend college, such as potential income from working instead of attending college. Therefore, choice C is the best answer.

Question 7

Your opportunity cost of choosing a particular activity

Accepted Answer

Opportunity cost varies depending on time and circumstances. It is not a fixed cost and can change based on various factors such as the availability of resources, alternatives, and market conditions. Therefore, it cannot be easily and accurately calculated, nor is it always measurable in monetary terms. Understanding the opportunity cost is crucial in making informed decisions and choosing the best option.

Question 8

Expenses for room and board

Accepted Answer

Room and board expenses are not usually part of the opportunity cost of attending college because they are expenses that would still exist even if the individual did not attend college.

Question 9

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

Accepted Answer

This is the basic principle of rational decision making. If an activity provides more benefits or utility than the next best alternative, a rational decision maker will choose that activity.

Question 10

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,...

Question 11

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

Accepted Answer

Opportunity cost is subjective and can vary depending on the choices and values of the individual or organization assessing it. It may also change as circumstances and options change.

Question 12

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

Accepted Answer

Opportunity cost can be measured in both dollar terms and in terms of real goods and services. The value of the next best alternative that one gives up in order to pursue a certain choice is the opportunity cost, and it is not always expressed in monetary value. It can also be measured in terms of the benefits or value of the foregone opportunity or alternative.

Question 13

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 14

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

Accepted Answer

The expression "time is money" reflects the economic concept of opportunity cost, which means that the cost of using a resource (in this case, time) is the opportunity to use that same resource in an alternative way (in this case, to earn money).

Question 15

The opportunity cost of college is the same for all students who are receiving full-tuition scholarships.

Accepted Answer

While full-tuition scholarships cover the cost of tuition, there are still other costs associated with college such as room and board, textbooks, and other fees. Additionally, students who attend college full-time are foregoing the opportunity to work full-time and earn a wage during that time. Therefore, the opportunity cost of college may vary for different students, even if they are receiving full-tuition scholarships.

Question 16

The opportunity cost of an activity

Accepted Answer

The opportunity cost of an activity depends on the individual's subjective values and opinions. Therefore, the best choice depends on each individual's personal circumstances and preferences, making it a subjective decision.

Question 17

Suppose you have a choice of working full-time during the summer or going full-time to summer school. Summer tuition and books are $2,200. If you worked, you could make $7,000. Your rent is $1,000 for the summer, regardless of your choice. The opportunity cost of going to summer school is, therefore,

Accepted Answer

The answer of Suppose you have a choice of working...

Question 18

The opportunity cost of going to college includes the costs of tuition, books, fees, and

Accepted Answer

The answer of The opportunity cost of going to college...

Question 19

Upon graduating from high school you have a job offer which would provide you with $20,000 in income for the coming year. You have also been accepted to Isaac and Avery college. Tuition for the coming year at I&A college is $15,000, room and board is $10,000 and you expect that books will cost you $2,000. What is the opportunity cost of attending I&A college?

Accepted Answer

The answer of Upon graduating from high school you have...

Question 20

The opportunity cost of going to college is best measured by the

Accepted Answer

The opportunity cost of going to college is the income forgone by not working, plus the tuition cost. This is because attending college means not working full-time during that period, which results in lost wages and potential career advancement opportunities. Room and board costs are optional and can be adjusted depending on individual choices, so they should not be included as an opportunity cost.

Quiz 2: Economic Tools and Economics Systems