Consumer surplus in a market for a good exists because: answer choices . b) Taking actions only if the marginal cost is zero. No contribution margin is generated by the transferring division when variable cost-based transfer prices are used. B) most decisions involve changes from the present situation. In operations research, the -----are prepared for situations. Opportunity Cost . ... Q. b) I and III only. Suppose that you are willing to pay $350 to see Leonard Cohen play at the Save-On-Foods Arena. The wants of human beings are unlimited. 1. (this multiple choice question has been scrambled) The law of increasing opportunity costs exists because: A) Resources are not perfectly adaptability or substitable in producing different goods. 13. What do your sunk costs equal? It improve the total cost b. d) I and III only. Managerial economics is ... Firms do not continue to grow without limit because of. Assuming that it is impossible to resell the Lady Gaga ticket, what is the minimum value you would have to place on a night at the opera, in order for you to choose the opera over Lady Gaga? A. the cost incurred in the past before we make a decision about what to do in the future. D. is not an issue addressed in economics. Which of the following statements about opportunity cost is TRUE? He has agreed to pay 10% interest on the loan. a) I, II and III. The opportunity cost of producing a given commodity is the value of the best forgone alternative which could have been produced with the factors of … Which of the following is the best definition of managerial economics? Opportunity cost c. Imputed cost d. Notional cost 42. B)$150. 37-C Opportunity cost is the benefit of next best alternative forgone. B)total revenue equals total opportunity cost. Tags: Question 8 . D) curve that is bowed outward if constant opportunity costs exist. Every month I also have the option of attending a meeting of the whiskey club (open only to Club members), at a cost per meeting of $15, payable at the beginning of each meeting. B)$150. Multiple choice Questions on Operations Research. These HTML online test quizzes on Operations Research have answers available with pdf, which is very useful in interview and also in HTML subject exam. The presence of sunk costs can affect future decision-making, if they are large enough. C)economic profit is maximized. Which of the following was relevant to this decision? 35) 36)In the above table, the firm All x ij = 0 or 1 c. All rim conditions are 1 d. All of the above 55. For example, a student may have to choose between doing A levels and going for a diploma right after finishing O levels. THE MICROECONOMICS OF PRODUCT MARKETS 273 Define and give examples of public goods. B)total revenue equals total opportunity cost. Because sunk costs cannot be recovered, they are irrelevant for future decision-making. For example, a student may have to choose between doing A levels and going for a diploma right after finishing O levels. 2. Economists use the term . Opportunity cost is equal to implicit costs plus explicit costs. Zero because price equals marginal costs. increase even though his explicit costs would rise, because he would now be free to earn $20/hour giving banjo lessons. Opportunity cost exists because a. technology is fixed at any point in time b. the law of comparative advantage is working c. resources are scarce but wants are unlimited d. the value of lost opportunities varies from person to person e. efficiency is measured by the monetary cost of an activity ANS: C 2. a) II and III only. II. 37-C Opportunity cost is the benefit of next best alternative forgone. (A) opportunity cost (B) utility (C) marginal cost (D) scarcity 28. 2. Solutions: Case Study - The Housing Market, Topic 4 Part 2: Applications of Supply and Demand, Solutions: Case Study - Automation in Fast Food, Introduction to Environmental Protection and Negative Externalities, Solutions: Case Study - The Liberal Gas Tax, Introduction to Cost and Industry Structure, 7.4 The Structure of Costs in the Long Run. The opportunity cost of seeing the movie is equal to: 6. To calculate accurately the opportunity cost of an action we need to first identify the next best alternative to that action. Web Links. On the day of the concert, a friend offers you a free ticket to the opera instead. Online Resources. C. that which we forgo, or give up, when we make a choice or a decision. Suppose that you deciding between seeing a move and going to a concert on a particular Saturday evening. Decision Science approach is a. Multi-disciplinary ... An alternative optimal solution to a minimization transportation problem exists whenever opportunity cost corresponding to unused route of transportation is: ... assigned at unused cell because a. For an individual, it may involve choosing the best from the choices available. Opportunity cost is the potential loss owed to a missed opportunity, often because somebody chooses A over B, the possible benefit from B is foregone in favor of A. a. Sunk cost b. 8) Economics involves marginal analysis because: A) marginal benefits always exceed marginal costs. 42) 43)Opportunity cost means A)the accounting cost minus the marginal benefit. The cost of options not taken is the opportunity cost. Risk neutral. a. Sunk cost b. b) The $300 I spent on gym clothes. 12. Test your understanding of Opportunity cost concepts with Study.com's quick multiple choice quizzes. 1. These HTML online test quizzes on Operations Research have answers available with pdf, which is very useful in interview and also in HTML subject exam. D)marginal revenue equals marginal cost. Required fields are marked *. Externalities exist … 35-D Opportunity cost is the benefit of next best alternative forgone. ECON 2105-2106 QUIZ 2 (CHAPTER 2) FALL 18 Multiple Choice Identify the choice that best completes the statement or answers the question 1. The means available to satisfy wants are limited. Your email address will not be published. B) sellers are unwilling to give up their product without a price. c. income taxes. ... Scarcity is a condition that exists when. C)the monetary costs of an activity. Suppose that you are willing to pay $20 to see a movie on Saturday night. C) we must give up something to get something else. An assignment problem is considered as a particular case of a transportation problem because a. Chapter 2. Opportunity cost: The value of the next-best alternative when a decision is made; it's what is given up. b) I Given this, what do my monthly SUNK COSTS equal? When idle capacity exists, there is no opportunity cost to producing intermediate products for another division. Scarcity: The condition that exists because there are not enough resources to produce everyone's wants. D)$180. III. This shows that she values the first coke she drinks at $1.20, the second at $1.15, and so on. 2. Operations Research Online Quiz Following quiz provides Multiple Choice Questions (MCQs) related to OS.You will have to read all the given answers and click on view answer option. This morning, I was trying to decide whether or not to actually go to the gym. to explain this behaviour. c) II only. As a member of UVic’s University Club, I pay $30 per month in membership fees. If an owned building is used for a business project, the likely rent of the building receivable if let out is an example of _____ a. Sunk cost b. Imputed cost c. Opportunity cost d. Notional cost 43. The concept of a risk premium applies to a person that is: Select correct option: Risk averse. Which of the following statements about opportunity cost is TRUE? Resource variability is the idea that all inputs are not equal; some are better for producing … Multiple-Choice Questions. Opportunity cost measures the cost of any choice in terms of the next best alternative foregone. Case Problem Sets. Work-leisure choices: The opportunity cost of deciding not to work an extra ten hours a week is the lost wages foregone. II. Which of the following statements about opportunity costs is TRUE? c. functional costs. The opportunity cost of your golf game is: 7. 1. B) The value of the dollar has diminished historically because of persistent inflation. Chapter 2. d) All of the above. Online Resources. The opportunity cost minus the cost of producing goods that go unsold. Missed a question here and there? A. mathematical models B. physical models diagrammatic C)$147. An opportunity cost: Multiple Choice Is an unavoidable cost because it remains the same regardless of the alternative chosen Requires a current outlay of cash. Positive because price exceeds average variable costs. III. D)marginal revenue equals marginal cost. Market-based transfer prices should be reduced by any costs avoided by selling internally rather than externally. Opportunity cost accounts for alternative uses of resources such as time and money. 35) 36)In the above table, the firm The relevant cost of any decision is its opportunity cost - the value of the next-best alternative that is given up. d) I and III only. Multiple Choice . a) III only. You were willing to pay up to $200 for this ticket, but it only cost you $110. Market-based transfer prices should be reduced by any costs avoided by selling internally rather than externally. In a typical month I spend about $50 on beer at the Club. Chapter 2—Economic Tools and Economics Systems MULTIPLE CHOICE 1. d) None of the statements is true. A. economical B. scientific C. a and b both D. artistic 2. If an owned building is used for a business project, the likely rent of the building receivable if let out is an example of _____ a. Sunk cost b. Imputed cost c. Opportunity cost d. Notional cost 43. Multiple Choice Questions 1. Some producers charge different prices for the good in different markets. C) there are opportunities to find ways to reduce costs. Economics Mcqs for Lecturer & Subject Specialist Exams. c) Taking actions whenever the marginal benefit exceeds the marginal cost. You were willing to pay up to $350 for this ticket, but it only cost you $100. D. the additional benefit of buying an additional unit of a product Positive because price exceeds average total costs. II. For an individual, it may involve choosing the best from the choices available. 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