Question 1

The term used to emphasize that making choices in the face of scarcity involves a cost is

Accepted Answer

Opportunity cost refers to the benefit that is missed or given up when an investor, individual, or business chooses one alternative over another. It represents the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.

Question 2

Joe likes to sleep late in the mornings and play tennis in the afternoons. The opportunity cost of Joe attending his morning class for one hour is

Accepted Answer

The opportunity cost of Joe attending his morning class for one hour is the next best alternative forgone, which in this case is an hour of sleep given up, since he likes to sleep late in the mornings.

Question 3

Fred and Ann are both given free tickets to see a movie. Both decide to see the same movie. We know that

Accepted Answer

Opportunity cost refers to the value of the next best alternative foregone by choosing a particular action. Even though the movie tickets were free, Fred and Ann still bear an opportunity cost for seeing the movie because they could have used their time to do something else. The concept of opportunity cost includes not just financial costs but also time and other resources.

Question 4

The opportunity cost of something you decide to get is

Accepted Answer

The opportunity cost of a decision is the value of the next best alternative that you forego by making that decision. This means it's the highest valued alternative given up to pursue a certain action or decision.

Question 5

The opportunity cost of any action is

Accepted Answer

The opportunity cost of any action is the highest-valued alternative given up when that action is chosen. It represents the benefits you could have received by taking the next best alternative action.

Question 6

You have the choice of going to Hawaii for a week, staying at work for the week, or spending the week skiing. If you decide to go to Hawaii, the opportunity cost is

Accepted Answer

The opportunity cost is the value of the next best alternative foregone. So, if you choose to go to Hawaii, the opportunity cost is the value of the next best alternative you would have chosen, which could be either working or skiing, depending on which one you would have preferred if you hadn't gone to Hawaii.

Question 7

The night before a midterm exam, you decide to go to the movies instead of studying for the exam. You score 60 percent on your exam. If you had studied the night before, you'd have scored 70 percent. What was the opportunity cost of your evening at the movies?

Accepted Answer

The opportunity cost of going to the movies instead of studying is the difference in exam scores you could have achieved by studying, which is 10 percent.

Question 8

Which of the following statements are CORRECT?
I. The "highest-valued alternative given up to get something" is the opportunity cost.
II. Wealthy economies don't experience opportunity costs.
III. Scarcity creates opportunity costs.

Accepted Answer

I. Opportunity cost is indeed defined as the value of the next best alternative that is forgone in making a decision. III. Scarcity, which refers to the limited nature of society's resources, is the reason why choices must be made about how resources are allocated, thus creating opportunity costs. Wealthy economies also experience opportunity costs because no economy has unlimited resources.

Question 9

John has two hours of free time this evening. He ranked his alternatives, first go to a concert, second go to a movie, third study for an economics exam, and fourth answer his e-mail. What is the opportunity cost of attending the concert for John?

Accepted Answer

The opportunity cost of an action is the value of the next best alternative foregone. Since attending a movie is John's second choice, it represents the opportunity cost of attending the concert.

Question 10

According to economists

Accepted Answer

Market capitalism is widely regarded by economists as the most efficient economic system for allocating resources and generating wealth. However, they also recognize that some government intervention and regulation can be beneficial for correcting market failures, protecting consumers, and ensuring fair competition, though it can also have negative effects if not properly implemented.

Question 11

On Saturday morning, you rank your choices for activities in the following order: go to the library, work out at the gym, have breakfast with friends, and sleep late. Suppose you decide to go to the library. Your opportunity cost is

Accepted Answer

The opportunity cost of an action is the value of the next best alternative that you give up. In this scenario, the next best alternative to going to the library is working out at the gym, making it the opportunity cost.

Question 12

Today, Julie attended her 12:30 Economics class. If she hadn't gone to class, Julie would have gone out to lunch with friends. She had other options; she could have worked or slept in. Julie's opportunity cost of going to class is the

Accepted Answer

The opportunity cost is the next best alternative foregone when making a decision. In this case, since Julie would have gone out to lunch with friends if she hadn't attended her class, the lunch she gave up is her opportunity cost.

Question 13

Opportunity cost means the

Accepted Answer

Opportunity cost refers to the value of the next best alternative that is given up when a decision is made. It is not about the monetary cost, but rather about what is sacrificed in terms of other opportunities.

Question 14

Opportunity cost is best defined as

Accepted Answer

Opportunity cost refers to the value of the next best alternative that one foregoes as a result of making a decision. It is not about the money paid for something (A or B), nor is it about all alternatives given up (D), but specifically about the highest-valued alternative forgone (C).

Question 15

The loss of the highest-valued alternative defines the concept of

Accepted Answer

Opportunity cost refers to the loss of the highest-valued alternative when a choice is made. It represents the benefits an individual, investor, or business misses out on when choosing one alternative over another.

Question 16

In economics we learn that

Accepted Answer

Tradeoffs require us to make choices between different options, implying that we cannot have more of everything we value. Opportunity cost is the value of the next best alternative given up when making a choice, not all possible alternatives.

Question 17

Opportunity cost is defined as the

Accepted Answer

Opportunity cost is the value of the next best alternative that one gives up as a result of making a decision. It's essentially the benefits you could have received by taking the next best alternative action.

Question 18

Which of the following is NOT part of the first big economic question?

Accepted Answer

The first big economic question focuses on what, how, and for whom goods and services are produced, not on why incentives affect only marginal costs.

Question 19

You have the choice of going on vacation to Florida for one week, staying at work for the week, or spending the week doing fix-up projects around your house. If you decide to go to Florida, the opportunity cost of the trip is

Accepted Answer

The opportunity cost of an action is the value of the next best alternative that you give up by choosing that action. If you choose to go to Florida, the opportunity cost is what you would have done otherwise, which could be either working or doing fix-up projects, depending on which was your next best alternative.

Question 20

Because we face scarcity, every choice involves

Accepted Answer

Scarcity means that we have limited resources but unlimited wants, so every choice we make involves an opportunity cost, which is the value of the next best alternative that we give up when we make a decision.

Quiz 1: What Is Economics