This assignment has 25 Multiple Choice questions, each worth 4 points. The total points for this assignment is 100.
The highest valued alternative that must be given up in order to choose an option is called the opportunity cost.
2. Opportunity cost is the cost incurred when one fails to take advantage of an opportunity.
3. On a production possibilities curve, the opportunity cost of good X, in terms of good Y, is represented by the distance to the curve from the vertical axis.
4. The amount of a good that must be given up to produce another good is the concept of opportunity cost.
5. The opportunity cost of an activity means the expected gains minus the expected costs of engaging in the activity.
6. An unemployed individual decides to spend the day fishing. The opportunity cost of fishing is the cost of bait, any other monetary expenses, and the value of the best alternative use of the individual's time.
7. Suppose that you own a house. The opportunity cost of living in the house is the rent you could have received from a tenant if you didn't live there.
