Evaluate the following statement. "I used my own money, my own land and my own equipment to start my business. Therefore I don't have any costs associated with running my business"
What will be an ideal response?
This is poor reasoning since all resources have an opportunity cost. Even though the money is the owner's it could still have been used for another purpose that might make him even more money. The land and equipment also could have been rented to someone else. The fact that no money changes hands doesn't make the cost of running the business go away.
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Which of the following statements is true?
A) Arguments based on anecdotes are always true. B) In the scientific method, anecdotes are more important than data. C) Arguments by example are appropriate when contradicting a blanket statement. D) It is easier for a researcher to jump to a wrong conclusion when she uses a large data set.
Moving along the supply curve for labor, increases in the quantity of labor result from ________
A) diminishing returns to labor effort B) a rising cost of leisure C) a reduced preference for leisure D) more efficient recruitment of workers