An unemployed individual decides to spend the day fishing. The opportunity cost of fishing is
A) zero, because the person doesn't have a job.
B) the cost of bait, any other monetary expenses, and the value of the individual's wages while he was working.
C) the cost of bait and any other monetary expenses.
D) the cost of bait, any other monetary expenses, and the value of the best alternative use of the individual's time.
D
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In the AS/AD model, in the short run, monetary policy affects:
A. only inflation. B. both inflation and real output. C. only real output. D. neither inflation nor real output.
Refer to the above figure. The market equilibrium quantity is Q1. Point Q2 represents the optimal amount of production. This indicates that there is
A. a positive externality. B. a negative externality. C. regressive taxation of the product. D. a public good which should be produced.