What is opportunity cost?
What will be an ideal response?
Opportunity cost refers to the highest-valued alternative that must be given up to engage in an activity. For example, the opportunity cost of taking this economics class is what you are giving up to take the class, which may be taking another class such as accounting or psychology, working extra hours at your job, or extra sleep (whichever is your highest-valued alternative).
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Suppose the equilibrium price of oranges is $2.00 per pound. If the actual price is above the equilibrium price a
A) shortage exists, and the price falls to restore equilibrium. B) surplus exists, and the price rises to restore equilibrium. C) shortage exists, and the price rises to restore equilibrium. D) surplus exists, and the price falls to restore equilibrium. E) surplus exists, but nothing happens until either the demand or the supply changes.
Suppose that an Italian working in the United States renounces his Italian citizenship and is granted U.S. citizenship. Which of the following will happen?
A. Italian GDP will fall; U.S. GNP will rise. B. Italian GNP will fall; U.S. GNP will rise. C. Italian GDP will fall; U.S. GDP will rise. D. Italian GNP will fall; U.S. GDP will rise.