12. Which of the following is an example of an opportunity cost to seeing a movi

Question

12. Which of the following is an example of an opportunity cost to seeing a movie? A) The benefit you receive from watching the movie B) The $10 you spent on the ticket C) The time you could have spent studying your economics D) Both b & c 13. Austin's total fixed cost at the bakery is $3,000 a month. Austin employs 10 workers and pays each worker $12 an hour. The marginal product of the 10th worker is 6 iced cupcakes an hour. What is the marginal cost of the last cupcake produced by the last worker Austin hired? A) $0.25 B) $0.86 C) $2.00 D) $12.00 14. The only producer of chocolate bunnies in the world, Choco's Bunny Company, recently expanded its production capacity from 2,000 to 4,000 bunnies per day. If the price elasticity of demand for bunnies is 1.75, by how much will the company have to reduce its price to sell the additional 2,000 bunnies (by the midpoint method)? A) 38% B) 1.75% C) 0.4% D) 20% 15. Which of the following statements is not correct? A) The competitive firm produces where P=MC. B) The monopolist produces where MR=MC. C) The competitive firm produces where MR-MC D) The monopolist produces where P=MC. 16. Which of the following statements is not correct? A) Monopolistic competition is different from monopoly because monopolistic competition is characterized by free entry, whereas monopoly is characterized by barriers to entry. B) Both monopolistic competition and oligopoly fall in between the more extreme market structures of competition and monopoly, C) Monopolistic competition is different from oligopoly because each seller in monopolistic competition is small relative to the market, whereas each seller can affect the actions of other sellers in an oligopoly. D) Both monopolistic competition and perfect competition are characterized by product differentiation. 17. Imperfectly competitive firms are characterized by A) horizontal demand curves. B) standardized products. C) price making ability D) a large number of small firms.

Explanation / Answer

12. C

Opportunity cost is what is foregone for choosing another alternative. By choosing to spend my time to watch a movie, I am a foregoing study of economics in that time. So, the lost economic study is the opportunity cost. Opportunity cost is also called implicit cost.

The $10 spent on the movie ticket is an explicit cost. It is not an opportunity cost.

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