The opportunity cost of an activity means the:
a. amount of money the activity costs.
b. number of hours that is required to engage in this activity.
c. expected gains by engaging in the activity.
d. amount of other things that must be sacrificed in order to engage in the activity.
e. expected gains minus the expected costs of engaging in the activity.
QUESTION 2The amount of a good that must be given up to produce another good is the concept of:
a. scarcity.
b. specialization.
c. trade.
d. efficiency.
e. opportunity cost.
QUESTION 3Which of the following statements is true?
a. An opportunity cost is what must be given up in order to get something else.
b. The three fundamental economic questions refer to What to produce? How to produce? and When to produce?
c. The term investment refers to the purchase of stocks and bonds and other financial securities.
d. The law of increasing opportunity cost implies that as production of one type of good is expanded then fewer and fewer of other goods must be given up.
QUESTION 4On a production possibilities curve, the opportunity cost of good X, in terms of good Y, is represented by the:
a. distance to the curve from the vertical axis.
b. distance to the curve from the horizontal axis.
c. movement along the curve.
d. all of these.
QUESTION 5Bill has 10 to spend on a Superman, Batman, or an X-Men T-shirt. Bill buys the Superman T-shirt and the Batman shirt was a close second choice. What is the opportunity cost?
a. The amount he spent, 10.
b. Nothing, since he got his preferred choice.
c. The Batman T-shirt.
d. The X-Men T-shirt.
QUESTION 6The opportunity cost of an economic decision is:
a. the best alternative that was sacrificed.
b. the amount of money needed to implement the decision.
c. any land, labor, and capital that are wasted.
d. all options that were lost due to scarcity.
QUESTION 7Which of the following does not illustrate opportunity cost?
a. If I study, I must give up going to the football game.
b. If I buy a computer, I must do without a 35 television.
c. If I spend more on clothes, I must spend less on food.
d. All of these illustrate opportunity cost.
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