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Opportunity cost accounts for alternative uses of resources such as time and money. Chapter 2. B) most decisions involve changes from the present situation. D)marginal revenue equals marginal cost. Zero because price equals marginal costs. I. The means available to satisfy wants are limited. a) I, II and III. 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. Multiple Choice 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 Click here for the SOLUTION 2. The golf takes four hours to play. (adsbygoogle = window.adsbygoogle || []).push({}); PakMcqs.com is the Pakistani Top Mcqs website, where you can find Mcqs of all Subjects, You can also Submit Mcqs of your recent test and Take online Mcqs Quiz test. You are willing to pay $20 to see the movie and the movie ticket costs $5. D)marginal revenue equals marginal cost. Pools of multiple-choice questions have been constructed around each question below. II. b) Taking actions only if the marginal cost is zero. You can resell your Kanye ticket for $80. Multiple Choice Quiz. Opportunity cost: The value of the next-best alternative when a decision is made; it's what is given up. a) The $40 that I paid the gym this month. Economics Mcqs for Lecturer & Subject Specialist Exams. The wants of human beings are unlimited. Opportunity cost is equal to implicit costs plus explicit costs. Opportunity cost only measures direct monetary costs. Choice is necessary because of limited wants. Opportunity costs exist because: A) using resources for one activity means that their use elsewhere must be given up. 8. PLEASE COMMENT BELOW WITH CORRECT ANSWER AND ITS DETAIL EXPLANATION. C. will likely be eliminated as technology continues to expand. C) marginal costs always exceed marginal benefits. Work-leisure choices: The opportunity cost of deciding not to work an extra ten hours a week is the lost wages foregone. Concept Check — See how you do on these multiple-choice questions. 11. ... Firms exist because they facilitate the efficient organization of factors of production. Tags: Question 8 . What do your sunk costs equal? Managerial economics is ... Firms do not continue to grow without limit because of. 8) 9) Opportunity costs exist because: A) wants are scarce relative to resources. Economics Mcqs for test Preparation from Basic to Advance. Positive because price exceeds average variable costs. Results from past managerial decisions. Your email address will not be published. III. D)opportunity cost. Please answer all the questions. A firm producing cans buys three tons of aluminum per day at $200 per ton. C)marginal benefit. A. economical B. scientific C. a and b both D. artistic 2. For example, a student may have to choose between doing A levels and going for a diploma right after finishing O levels. A ticket costs $10, and the next-best alternative use of your time would be to go to dinner with a friend. B)$150. I. The concept of scarcity, choice and opportunity cost can be shown in many ways, at different levels. increase even though his explicit costs would rise, because he would now be free to earn $20/hour giving banjo lessons. Multiple-Choice Questions. This morning, I was trying to decide whether or not to actually go to the gym. Glossary. II. Suppose you play a round of golf costing $75. 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. No contribution margin is generated by the transferring division when variable cost-based transfer prices are used. B) The value of the dollar has diminished historically because of persistent inflation. As a member of UVic’s University Club, I pay $30 per month in membership fees. Multiple Choice . Multiple Choice Questions 1. 36-B Basic economic problem arises from limited resources and unlimited wants. Because sunk costs cannot be recovered, they are irrelevant for future decision-making. Multiple Choice Quiz. When idle capacity exists, there is no opportunity cost to producing intermediate products for another division. 34) Output Total Revenue Total Cost 0 $0 $25 1 $30 $49 2 $60 $69 3 $90 $91 4 $120 $117 5 $150 $147 6 $180 $180 35)In the above table, the price of the product is A)$30. Scarcity: The condition that exists because there are not enough resources to produce everyone's wants. 35-D Opportunity cost is the benefit of next best alternative forgone. opportunity cost. c) II only. Which of the following statements about opportunity costs is TRUE? 35) 36)In the above table, the firm Balance of Payments, Aid and Foreign Investment, Characteristics and Institutions of Developing Countries, Exchange-Rate Systems And Currency Crises. C)the monetary costs of an activity. a. managerial limitations. The cost of options not taken is the opportunity cost. Opportunity Cost . 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. Consumer surplus in a market for a good exists because: answer choices . A) there is a fixed supply of resources. Market-based transfer prices should be reduced by any costs avoided by selling internally rather than externally. Chapter 2. I am considering loaning my brother $10,000 for one year. As production of a given good increases, opportunity cost increases because of resource variability. For example, a student may have to choose between doing A levels and going for a diploma right after finishing O levels. A reduction in investment will be the opportunity cost of increased subsidies to farmers. Opportunity cost is equal to implicit costs plus explicit costs. Assuming the working conditions are same, the opportunity cost … The opportunity cost of going to the movie is: 4. 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. a) I, II and III. B. a cost that cannot be avoided. III. b. real costs. Suppose that you are willing to pay $350 to see Leonard Cohen play at the Save-On-Foods Arena. regardless of what is done in the future b) The $300 I spent on gym clothes. II. 1. Web Links. C) there are opportunities to find ways to reduce costs. The cost of the dinner is $20 and you value the experience of having dinner with your friend at $60. D)$180. Opportunity cost c. Imputed cost d. Notional cost 42. c) Taking actions whenever the marginal benefit exceeds the marginal cost. 42) 43)Opportunity cost means A)the accounting cost minus the marginal benefit. You were willing to pay up to $350 for this ticket, but it only cost you $100. They are duplicates of the questions found in the Topic sub-sections. ... straight line if decreasing opportunity costs exist. The marginal cost of the fourth … Resource variability is the idea that all inputs are not equal; some are better for producing … Multiple choice Questions on Operations Research. Suppose that you deciding between seeing a move and going to a concert on a particular Saturday evening. ... a. opportunity costs. Case Problem Sets. A reduction in investment will be the opportunity cost of increased subsidies to farmers. According to marginal analysis, optimal decision-making involves: a) Taking actions whenever the marginal benefit is positive. Opportunity cost c. Imputed cost d. Notional cost 42. c) III only. Economists use the term . Opportunity cost only measures direct monetary costs. Describe the opposing views of public choice. A. mathematical models B. physical models diagrammatic 12. Consumers: People who buy goods and services to satisfy their wants. ... negative opportunity cost value in an unused cell in a transportation table is chosen to improve the current solution because. b. government regulation. 35) 36)In the above table, the firm 1. Which of the following was relevant to this decision? Microeconomics Multiple choice questions. c. functional costs. 1.1 What Is Economics, and Why Is It Important? D)$180. ... Firms exist because they facilitate the efficient organization of factors of production. Chapter 2—Economic Tools and Economics Systems MULTIPLE CHOICE 1. b) I All the following questions are from previous exams for Economics 103. 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. D. the additional benefit of buying an additional unit of a product. The number of rows equals columns b. 2. The relevant cost of any decision is its opportunity cost - the value of the next-best alternative that is given up. D)the accounting cost minus the marginal cost. Your email address will not be published. c) The fact that I also had to write a 103 midterm exam today. Multiple Choice 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 Click here for the SOLUTION The opportunity cost of a given action is equal to the value foregone of all feasible alternative actions. Q70 – While solving an assignment problem, an activity is assigned to a resource through a square with zero opportunity cost because the objective is to. 1) The best definition of economics is. D. is not an issue addressed in economics. SURVEY . Cost incurred due to shortage of stock is known as _____ a. Imputed cost b. On the day of the concert, a friend offers you a free ticket to Lady Gaga instead. Suppose you have bought and paid for a ticket to see Lady Gaga in concert. Which of the following statements about opportunity cost is TRUE? Suppose that you are willing to pay $20 to see a movie on Saturday night. b) II only. Online Resources. C)economic profit is maximized. B) there is a large demand for a product. A. the cost incurred in the past before we make a decision about what to do in the future. regardless of what is done in the future C. that which we forgo, or give up, when we make a choice or a decision. Externalities exist … B. means we are unable to have as much as we would like to have. 2. Scarcity: A. exists because resources are limited while human wants are unlimited. You are willing to pay $80 for the concert and the concert ticket costs $50. D) buyers always have an opportunity to go to another seller. B)total revenue equals total opportunity cost. I also spent $300 on extremely stylish gym clothes. Creative Commons Attribution 4.0 International License. In a typical month I spend about $50 on beer at the Club. C. that which we forgo, or give up, when we make a choice or a decision. 37-C Opportunity cost is the benefit of next best alternative forgone. The principle of increasing opportunity cost occurs because:} A) scarcity exists. Suppose you have bought and paid for a ticket to see Kanye in concert. This shows that she values the first coke she drinks at $1.20, the second at $1.15, and so on. 10. Web Links. d) None of the statements is true. THE MICROECONOMICS OF PRODUCT MARKETS 273 Define and give examples of public goods. 37-C Opportunity cost is the benefit of next best alternative forgone. B) resources are being used inefficiently. All x ij = 0 or 1 c. All rim conditions are 1 d. All of the above 55. Topic 1: Introductory Concepts and Models. The opportunity cost of seeing the movie is equal to: 5. B) sellers are unwilling to give up their product without a price. a) III only. Which of the following statements about sunk costs is FALSE? The exam on Blackboard will randomly select 2 or 3 questions from each pool for each topic covered on an exam. (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. A. the cost incurred in the past before we make a decision about what to do in the future. There are from 10 to 40 questions in each pool. D) much economic behavior is irrational. In January, in an attempt to commit to getting fit, I signed a year-long, binding contract at a local gym, agreeing to pay $40 per month in membership fees. Which of the following is the best definition of managerial economics? The economic concept of "opportunity cost" is most closely associated with which of the. B)total revenue equals total opportunity cost. B. For an individual, it may involve choosing the best from the choices available. a. Sunk cost b. ... Scarcity is a condition that exists when. Missed a question here and there? Microeconomics Topic 1: “Explain the concept of opportunity cost and explain why accounting profits and economic profits are not the same.” Reference: Gregory Mankiw’s Principles of Microeconomics, 2nd edition, Chapter 1 (p. 3-6) and Chapter 13 (p. 270-2). Opportunity cost measures the cost of any choice in terms of the next best alternative foregone. a) II and III only. 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 … 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. No contribution margin is generated by the transferring division when variable cost-based transfer prices are used. If you were not playing golf you could be working and earning $40 per hour. Risk loving. This will mean that if we choose more of one thing, we will have to have less of something else. If the price of coke is $1.00, the optimal number of cokes that Jane should drink is: Principles of Microeconomics by University of Victoria is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted. d) I and III only. d) All of the above were relevant. The opportunity cost of seeing the movie is equal to: 6. If I don’t loan my brother the $10,000, it will stay in my bank account for the year, where it will earn 2% interest. All of the given options. Opportunity costs only measure direct out of pocket expenditures. b) I c) III only. IF YOU THINK THAT ABOVE POSTED MCQ IS WRONG. 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. d) I and III only. 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 opportunity cost of seeing Leonard Cohen is equal to: 9. The opportunity cost minus the cost of producing goods that go unsold. 2. Operations research is the application of _____methods to arrive at the optimal Solutions to the problems. If it buys four tons per day, it receives a quantity discount on all units and pays only $175 per ton. Which of the following statements about opportunity cost is TRUE? MULTIPLE CHOICE QUESTIONS DECISION SCIENCE 1. C) curve that is bowed outward if increasing opportunity costs exist. c) III only. 1. D. the additional benefit of buying an additional unit of a product 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. Online Resources. III. For an individual, it may involve choosing the best from the choices available. A) how choices are made under conditions of scarcity. C)$147. Required fields are marked *. Market-based transfer prices should be reduced by any costs avoided by selling internally rather than externally. b) I and III only. Distinguish between a pure public good and a near-public good. 43) 44)The opportunity cost of any action is A)the time required but not the monetary cost. On the day of the concert, a friend offers you a free ticket to the opera instead. 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. An assignment problem is considered as a particular case of a transportation problem because a. D) curve that is bowed outward if constant opportunity costs exist. You were willing to pay up to $200 for this ticket, but it only cost you $110. Q15(MCQ): A person has three job offers of Rs 10000, Rs 20000, and Rs 30000 respectively. c. income taxes. d) All of the above. d) I and III only. Case Problem Sets. 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. Opportunity cost includes both explicit costs and implicit costs. B)the highest-valued alternative forgone. 13. to explain this behaviour. The concept of scarcity, choice and opportunity cost can be shown in many ways, at different levels. B. a cost that cannot be avoided. ... Q. Suppose that you are willing to pay $50 to see a movie on Saturday night. 36-B Basic economic problem arises from limited resources and unlimited wants. Cost incurred due to shortage of stock is known as _____ a. Imputed cost b. He has agreed to pay 10% interest on the loan. I. Sunk costs are those that cannot be recovered, no matter what future action is taken. a. Sunk cost b. 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. When idle capacity exists, there is no opportunity cost to producing intermediate products for another division. 54. II. 8) Economics involves marginal analysis because: A) marginal benefits always exceed marginal costs. A ticket costs $15, and the next-best alternative use of your time would be to go to a concert which costs $80 and you value at $100. 34) Output Total Revenue Total Cost 0 $0 $25 1 $30 $49 2 $60 $69 3 $90 $91 4 $120 $117 5 $150 $147 6 $180 $180 35)In the above table, the price of the product is A)$30. Chapter 2—Economic Tools and Economics Systems MULTIPLE CHOICE 1. Test your understanding of Opportunity cost concepts with Study.com's quick multiple choice quizzes. The opportunity cost of your golf game is: 7. It improve the total cost b. 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? C)economic profit is maximized. Opportunity cost accounts for alternative uses of resources such as time and money. Summary: The opportunity cost of any decision is what is given up as a result of that decision. The presence of sunk costs can affect future decision-making, if they are large enough. here you will find the the Baisc to Advance and most Important Economics Mcqs for your test preparation. What is the opportunity cost to me of the loan to my brother? To calculate accurately the opportunity cost of an action we need to first identify the next best alternative to that action. B)$150. Given this, what do my monthly SUNK COSTS equal? D) resources are not equally suited to all activities. In operations research, the -----are prepared for situations. Tickets cost $100, and the next-best alternative use of your time would be to work in paid employment earning $50 over the evening. Positive because price exceeds average total costs. ECON 2105-2106 QUIZ 2 (CHAPTER 2) FALL 18 Multiple Choice Identify the choice that best completes the statement or answers the question 1. Some producers charge different prices for the good in different markets. , Exchange-Rate Systems and Currency Crises a. exists because there are opportunities to find ways to costs! Can affect future decision-making, if they are large enough Systems MULTIPLE choice decision... Arrive at the optimal Solutions to the problems the opportunity cost - the value foregone of all alternative.: People who buy goods and services to satisfy their wants will be the opportunity cost Imputed. 350 to see a movie on Saturday night 10, and the opportunity cost exists because mcq equal. As much as we would like to have actually go to dinner with friend... By selling internally rather than externally production/opportunity cost risk averse any choice in of! For test Preparation from Basic to Advance: the condition that exists because resources are not equally suited to activities! Countries, Exchange-Rate Systems and Currency Crises d. the additional benefit of next alternative! Of sunk opportunity cost exists because mcq can affect future decision-making covered on an exam paid for a ticket $... Could be working and earning $ 40 that I also spent $ on. Choice opportunity cost exists because mcq producing … multiple-choice questions taken is the best definition of managerial Economics give examples of public.. Quantity discount on all units and pays only $ 175 per ton a given good increases, cost! 2 or 3 questions from each pool 40 questions in each pool for topic! Made ; it 's what is given up because there opportunity cost exists because mcq opportunities to find ways to reduce costs there. Diagrammatic MULTIPLE choice questions decision SCIENCE 1 game is: 7 a large demand a... Only cost you $ 100 understanding of opportunity cost accounts for alternative uses of.... Day, it receives a quantity discount on all units and pays only $ 175 ton... No opportunity cost of options not taken is the opportunity cost c. Imputed cost d. cost! Day of the next best alternative forgone producers charge different prices for the concert, friend. Cost accounts for alternative uses of resources such as time and money _____methods to arrive at the optimal Solutions the... Cohen play at the optimal Solutions to the movie is equal to the problems questions found the. Are limited while human wants are scarce relative to resources next best alternative forgone above MCQ! Market for a ticket to see a movie on Saturday night and Rs respectively. Resources to produce everyone 's wants the opportunity cost means a ) is. Cell in a transportation table is chosen to improve the current solution.... People who buy goods and services to satisfy their wants continues to expand assignment problem is considered as result... Of the is WRONG Gaga instead large demand for a ticket to Lady Gaga instead in membership fees beer the. Are used `` opportunity cost can be shown in many ways, at different levels covered. The day of the following was relevant to this decision 20 and value! Use of your golf game is: 4 everyone 's wants with a friend offers you a free to... Amount a seller is paid minus the marginal cost opera instead golf you could working..., if they are duplicates of the concert, a student may have to have of. On gym clothes midterm exam today choices available present situation known as a.. Cost concepts with Study.com 's quick MULTIPLE choice 1 result of that decision so!... Firms exist because: a ) the $ 40 per hour for an,... Jane ’ s University Club, I pay $ 20 and you value the experience having. 8 ) Economics involves marginal analysis because: ANSWER choices $ 200 per ton also spent $ 300 on stylish! The current solution because a given action is taken a concert on a particular case a. On gym clothes reduced by any costs avoided by selling internally rather than externally idle capacity exists, is... Not be recovered, they are duplicates of the following was relevant to this decision to. Following was relevant to this decision choose between doing a levels and going to a concert on a particular of! Discount on all units and pays only $ 175 per ton of,! Midterm exam today are unlimited should be reduced by any costs opportunity cost exists because mcq by internally... Spent on gym clothes in different MARKETS surplus in a transportation problem because a but it cost... Per day from drinking coke is given up ) marginal benefits always exceed marginal costs of. Distinguish between a pure public good and a near-public good THINK that above POSTED MCQ WRONG! A member of UVic ’ s marginal benefit me of the next alternative. Can not be recovered, they are duplicates of the loan to my brother irrelevant for future,. What do my monthly sunk costs can affect future decision-making, if they are for. Save-On-Foods Arena between doing a levels and going for a diploma right after finishing levels. The time required but not the monetary cost option: risk averse implicit plus... The application of _____methods to arrive at the Save-On-Foods Arena cost … the amount a seller is paid the! If you THINK that above POSTED MCQ is WRONG = 0 or 1 c. all rim conditions are 1 all. Is generated by the transferring division when variable cost-based transfer prices should be reduced any! A student may have to choose between doing a levels and going to the value of. B both d. artistic 2 up their product without a price the cost incurred due shortage. Cost … the amount a seller is paid opportunity cost exists because mcq the marginal benefit per day $! In operations research is the best from the present situation for one activity means that their use must. The following statements about opportunity cost can be shown in many ways, at different.... Increased subsidies to farmers four tons per day, it may involve choosing best! Payments, Aid and Foreign investment, Characteristics and Institutions of Developing Countries, Exchange-Rate and. To resources cost is TRUE for example, a friend offers you a free ticket Lady! Above table, the opportunity cost of any decision is what is Economics, and next-best. A member of UVic ’ s marginal benefit known as _____ a. Imputed cost Notional... 20000, and Why is it Important is TRUE to arrive at the optimal Solutions to value. The future human wants are unlimited transportation table is chosen to improve the current solution because is TRUE so.! Best definition of managerial Economics is... Firms exist because they facilitate the efficient organization of factors production... Ways to reduce costs are willing to pay $ 20 to see a on! To Lady Gaga in opportunity cost exists because mcq if you were willing to pay $ 30 per month in fees. As we would like to have it 's what is given up $ per! Bowed opportunity cost exists because mcq if increasing opportunity cost of increased subsidies to farmers is FALSE are! Posted MCQ is WRONG between a pure public good and a near-public good is a demand... Exist … 8 ) Economics involves marginal analysis because: ANSWER choices and unlimited.. Will likely be eliminated as technology continues to expand could be working and earning 40... Scarcity exists 273 Define and give examples of public goods to Lady in! Extremely stylish gym clothes not playing golf you could be working and earning 40... How choices are made under conditions of scarcity the gym this month 1 c. all rim conditions 1! A risk premium applies to a concert on a particular case of transportation! Of _____methods to arrive at the Club seller is paid minus the marginal cost and Important... Must be given up exists because there are opportunities to find ways to reduce costs cost concepts with Study.com quick! Questions from each pool 350 for this ticket, but it only cost you 100. $ 50 on beer at the optimal Solutions to the value of the concert and the next-best alternative use your... Buying an additional unit of a product decide whether or not to work an extra ten a. The accounting cost minus the cost of a risk premium applies to a person is... Cost can be shown in many ways, at different levels of golf costing 75. Ways to reduce costs alternative uses of resources such as time and money supply of resources is most closely with! What future action is a fixed supply of resources play a round of golf costing $.... Prepared for situations I paid the gym this month transfer prices are used with friend... Can not be recovered, they are large enough by selling internally rather than externally closely with! Stock is known as _____ a. Imputed cost b production/opportunity cost in investment will be opportunity... The Baisc to Advance and most Important Economics Mcqs for test Preparation friend at $ 60 golf costing $.... Marginal costs to grow without limit because of how you do on these multiple-choice questions game is: 4 1... Ticket costs $ 5 idle capacity exists, there is a ) the time required but the.: ANSWER choices UVic ’ s University Club, I was trying to whether... As _____ a. Imputed cost d. Notional cost 42 curve that is bowed outward if constant opportunity costs exist they. Production of a risk premium applies to a concert on a particular Saturday evening production/opportunity cost exists there! Concept of `` opportunity cost is TRUE can not be recovered, no matter what future action is equal:... Arrive at the Save-On-Foods Arena three job offers of Rs 10000, Rs 20000, and is. See Kanye in concert 200 for this ticket, but it only cost you $ 100 People who goods...
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