Which of the following best describes a tradeoff?
a. An office executive enrolling into a management course to develop her skills.
b. An investor buying stocks of a start-up company.
c. A businessman investing a portion of company's profit in research and development.
d. A college student sacrificing a few hours of study time to work at the town cafeteria.
e. A worker purchasing a new car with her bonus earnings.
QUESTION 2Both monopolistically and perfectly competitive firms earn only normal profits in the long run.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3The giving up of a good or activity in order to obtain some other good or activity is called:
a. a tradeoff.
b. a cost analysis.
c. a random choice.
d. an opportunity cost.
e. a sunk cost.
QUESTION 4In a monopolistically competitive industry, firms which enter the market in the long run produce a close substitute and not a standardized product.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5Which of the following is related to the concept of trade-off used in economics?
a. Paying tuition to attend college
b. Paying a high price for a movie ticket on the first day of screening
c. Not having enough information available to make a rational decision
d. Giving up one good or activity in order to obtain some other good or activity
e. Having your cake and eating it too
QUESTION 6Suppose a monopolistically competitive firm is producing at the profit-maximizing output level and is receiving a price that is sufficient to cover only its average variable cost. If the price falls further the firm should suspend its operations.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 7Nicky makes 25,000 a year as a sales clerk. He then decides to quit his job to enter a MBA program full-time (assume Nicky doesn't work in the summer or hold any part-time jobs). His tuition, books, living expenses, and fees total 15,000 a year. Given this information, the annual total cost of Nicky's MBA studies is:
a. 10,000.
b. 30,000.
c. 40,000.
d. 15,000.
e. 25,000.
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