You decide that it is time to buy a big family car. The opportunity cost you consider is:
a. the cost of the car.
b. the increase in comfort for your family while traveling.
c. the return this money would have earned if it was invested otherwise.
d. the inconvenience you and your family are bearing on account of your old car.
C
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Profits are maximized when
A) price equals marginal revenue. B) marginal revenue equals average total costs. C) marginal revenue equals marginal cost. D) when price equals average total costs.
National defense is provided by the government because
a. it is impossible for private markets to produce public goods. b. products provided by the government are produced more efficiently. c. free-riders make it difficult for private markets to supply the socially optimal quantity. d. public goods increase government revenues.