#1
What does opportunity cost represent in economics?
The value of the next best alternative foregone
ExplanationOpportunity cost is the value of the best alternative given up.
#2
Which of the following best describes opportunity cost?
The value of the best alternative given up
ExplanationOpportunity cost helps in evaluating trade-offs in decision-making.
#3
What is the primary goal of economic decision-making?
Maximizing utility
ExplanationAll of the above are relevant when considering opportunity cost.
#4
In economic terms, what does 'scarcity' refer to?
The limited nature of society's resources
ExplanationThe time spent studying for an exam instead of socializing is an example of a non-monetary opportunity cost.
#5
Which of the following best defines the concept of 'trade-off'?
The situation that involves sacrificing one thing for another
ExplanationScarcity necessitates the concept of opportunity cost.
#6
Which of the following accurately represents the concept of a 'trade-off'?
The decision to pursue one goal over another
ExplanationScarcity necessitates the concept of opportunity cost.
#7
What is the relationship between opportunity cost and decision-making?
Opportunity cost helps in evaluating trade-offs in decision-making
ExplanationBy carefully considering all available alternatives, one can reduce opportunity cost in decision-making.
#8
How can one reduce opportunity cost in decision-making?
By carefully considering all available alternatives
ExplanationChoosing to watch a movie instead of studying for an exam represents an example of opportunity cost.
#9
What is the opportunity cost of producing one more unit of a good or service?
The marginal cost
ExplanationIn a production possibility frontier (PPF), a point inside the curve represents attainable but inefficient production levels.
#10
In a production possibility frontier (PPF), what does a point inside the curve represent?
Attainable but inefficient production levels
ExplanationA country's ability to produce a good or service at a lower opportunity cost than another country defines comparative advantage.
#11
Which of the following is NOT a factor affecting opportunity cost?
Government regulations
ExplanationThe limited nature of society's resources defines scarcity.
#12
Which of the following is an example of a non-monetary opportunity cost?
The time spent studying for an exam instead of socializing
ExplanationSpecialization decreases opportunity cost.
#13
Which of the following accurately represents an example of opportunity cost?
Choosing to watch a movie instead of studying for an exam
ExplanationThe opportunity cost of producing one more unit of a good or service is the marginal cost.
#14
Which of the following statements accurately describes comparative advantage?
A country's ability to produce a good or service at a lower opportunity cost than another country
ExplanationThe primary goal of economic decision-making is maximizing utility.
#15
When considering opportunity cost, what is the relevance of the production possibility frontier (PPF)?
All of the above
ExplanationGovernment regulations are not a factor affecting opportunity cost.
#16
What is the relationship between opportunity cost and specialization?
Specialization decreases opportunity cost
ExplanationThe situation that involves sacrificing one thing for another defines trade-off.
#17
Which of the following scenarios best exemplifies opportunity cost?
Choosing to work overtime instead of spending time with family
ExplanationThe cost of attending college instead of working full-time is an example of an implicit opportunity cost.
#18
What does the concept of 'economic rent' refer to?
The surplus payment to a factor of production above what is necessary to keep it in its current use
ExplanationThe potential return from the next best alternative foregone represents the opportunity cost of choosing to invest money in stocks instead of bonds.