Which 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. More consumer spending now means more spending in the future.
d. If I spend more on clothes, I must spend less on food.
QUESTION 2The opportunity cost of watching television is:
a. all of the alternative programs that appear on other stations.
b. zero because there is no money expenditure involved.
c. the alternative use of the time foregone by watching the program.
d. zero if it benefits you.
QUESTION 3The opportunity cost of a purchase is:
a. the selling price of the good or service.
b. zero if the good or service satisfies a need.
c. greater for persons who are rich.
d. the good or service given up for the good or service purchased.
QUESTION 4Opportunity cost is the:
a. cost incurred when one fails to take advantage of an opportunity.
b. price paid for goods and services.
c. cost of the best option forgone as a result of choosing an alternative option.
d. undesirable aspects of an option.
QUESTION 5Suppose that the alternative uses of an hour of your time in the evening, ranked from best to worst, are (1) study economics, (2i) watch two half-hour TV sitcoms, (3) play pool, and (4) jog around town. You can only choose one activity. What is the opportunity cost of studying economics for one hour, given this information?
a. Jogging around town.
b. Watching two half-hour TV sitcoms.
c. Playing pool.
d. The sum of watching two half-hour TV sitcoms, playing pool, and doing your laundry.
QUESTION 6A good or service that is forgone by choosing one alternative over another is called a(n):
a. explicit cost. b. opportunity cost.
c. historical cost. d. accounting cost.
QUESTION 7The opportunity cost to a city for using local tax revenues to construct a new park is the:
a. best alternative foregone by building the park.
b. dollar cost of constructing the new park.
c. dollar cost of the old park.
d. increased taxes necessary to pay for maintenance of the new park.
QUESTION 8Which of the following sayings best reflects the concept of opportunity cost?
a. You can't teach an old dog new tricks. b. There is no such thing as a free lunch.
c. I have a baker's dozen. d. There's no business like show business.
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