12 Questions
What is the formula for calculating the net benefit of attending the concert?
Enjoyment from attending − Cost of ticket
Which economic concept is defined as 'What you lose when you choose one action rather than the next best alternative'?
Opportunity cost
How is economic cost calculated?
Direct costs + Opportunity cost
What is considered an economic cost according to the text?
Direct costs + Opportunity cost
When should an action be taken?
If the benefit is greater than the economic cost
Which concept reflects the lost opportunity when choosing one action over another?
Opportunity cost
What is the economic rent from attending the concert?
$8
In terms of economic rent, what does it signify when an individual chooses an option with a greater net benefit than the next best alternative?
Economic rent
What is innovation rent in the context of introducing new technology?
Profits exceeding the opportunity cost of capital
How are economic rents related to incentives in the economy?
They provide rewards or punishments that influence actions
What do relative prices signify in economics?
The ratio of one price to another
How is net benefit calculated in the context of economic decisions?
$55−$30
Test your knowledge on how individuals make decisions based on costs and benefits in economics. Understand the concept of net benefit by comparing the enjoyment obtained from an activity with its cost. Explore different scenarios where individuals evaluate various options for spending their time.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
