Referring to Situation #1 suppose that you can now hire two workers. What is the opportunity cost of the second executive's work from the viewpoint of the company? Explain
What will be an ideal response?
The second executive's work is simply the value of the next best opportunity which is the work that could have been done by the third executive which is $500,000
You might also like to view...
Assuming that there are NO income taxes, if both autonomous taxes, and government expenditures were to rise by $100 million, we would expect equilibrium GDP to
A) rise by $100 million. B) rise, but by a multiple of $100 million. C) rise by less than $100 million. D) remain unaffected because leakages have changed by the same amount.
If the price of inputs rises and consumer expectations about future economic activity worsens:
a. The change in price index is uncertain, and real GDP falls. b. The change in price index is uncertain, and real GDP rises. c. Price index rises, and the change in real GDP is uncertain. d. Price index falls, and real GDP rises. e. Price index falls, and real GDP falls.