Opportunity Cost Quiz

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What is the opportunity cost of choosing to see the movie?

a. the economics club event you missed, and the time spent not studying for the exam.

In the context of the options for Friday night, what is the opportunity cost of choosing to see the movie?

a. the economics club event you missed, and the time spent not studying for the exam.

Why do people watch more movies during an economic downturn?

During tough economic times, people seek affordable entertainment options like movies.

What is considered as an opportunity cost of attending school?

Some out-of-pocket costs Signup and view all the answers

Why is the $24,000 spent on apartment and food not considered an opportunity cost of attending school?

Spent either way Signup and view all the answers

Why is the $70,000 salary forgone by not working considered an opportunity cost?

Money that you gave up Signup and view all the answers

Why is not all 10 hours of study time considered an opportunity cost?

Job requires 10 hours Signup and view all the answers

What is the key definition of opportunity cost?

The true cost of something is the next best alternative you have to give up to get it. Signup and view all the answers

Why is it important to consider opportunity cost?

To focus on the trade-offs associated with a particular option and understand what you give up to pursue that option. Signup and view all the answers

In the scenario provided, what was the ranking of options to spend the one-hour break between classes?

<ol> <li>Work on homework, 2. Hang out with friends, 3. Watch something on Netflix, 4. Take a nap</li> </ol> Signup and view all the answers

If you chose to work on homework during the one-hour break, what was the opportunity cost of your choice?

Hanging out with friends Signup and view all the answers

How can opportunity cost help in decision-making?

By making individuals consider what they are giving up to choose a specific option. Signup and view all the answers

What does the scenario of the one-hour break illustrate about opportunity cost?

That every choice made involves giving up the opportunity to do something else. Signup and view all the answers

How does the limited time available for studying economics affect the time available for studying psychology?

It reduces the time available for studying psychology. Signup and view all the answers

How does having only one oven affect the preparation of dinner?

It may prevent preparing all the main dish and side dishes. Signup and view all the answers

How does Microsoft hiring the most talented software engineers in Toronto affect other tech companies in the area?

Fewer talented people will be available for other companies to hire. Signup and view all the answers

How does your friends' choice of buying iPhones influence your decision to buy one?

You may want to buy an iPhone to maximize OS compatibility across phones. Signup and view all the answers

How do declining interest rates in the credit market affect the decision to buy a home?

It makes it less expensive to get a mortgage, which might lead to buying a home. Signup and view all the answers

How does the availability of high-quality, low-cost child care options influence the decision to join the labor market?

It affects the decision to work as a worker in the labor market. Signup and view all the answers

What principle is concerned with evaluating whether benefits outweigh costs?

The Cost-Benefit Principle Signup and view all the answers

What principle emphasizes the importance of considering the next best alternative when making a decision?

The Opportunity Cost Principle Signup and view all the answers

How do decisions made today impact future opportunities and choices?

Decisions made today shape future opportunities and decisions. Signup and view all the answers

Why is it important to consider the Marginal Principle in decision-making?

The Marginal Principle helps in determining whether one more unit of a good or service is worth the cost. Signup and view all the answers

What factors should be considered when deciding whether to go to grad school and get an MBA?

Future job opportunities and salary are affected by this decision. Signup and view all the answers