Suppose that you deciding between seeing a move and going to a concert on a particular Saturday evening. Case Problem Sets. What do your sunk costs equal? Summary: The opportunity cost of any decision is what is given up as a result of that decision. Jane’s marginal benefit per day from drinking coke is given in the table below. Which of the following was relevant to this decision? Multiple Choice . Tickets cost $100, and the next-best alternative use of your time would be to work in paid employment earning $50 over the evening. Opportunity cost accounts for alternative uses of resources such as time and money. The opportunity cost of seeing the movie is equal to: 6. B)the highest-valued alternative forgone. D)marginal revenue equals marginal cost. Some producers charge different prices for the good in different markets. C) marginal costs always exceed marginal benefits. The opportunity cost of seeing the movie is equal to: 5. D) resources are not equally suited to all activities. Opportunity cost only measures direct monetary costs. Which of the following is the best definition of managerial economics? If you were not playing golf you could be working and earning $40 per hour. 1. The opportunity cost minus the cost of producing goods that go unsold. In a typical month I spend about $50 on beer at the Club. 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. 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. Assuming the working conditions are same, the opportunity cost … The opportunity cost of going to the movie is: 4. ... Scarcity is a condition that exists when. (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. D)opportunity cost. to explain this behaviour. Zero because price equals marginal costs. Given this, what do my monthly SUNK COSTS equal? As production of a given good increases, opportunity cost increases because of resource variability. C) we must give up something to get something else. Your email address will not be published. Opportunity cost is equal to implicit costs plus explicit costs. 11. II. As a member of UVic’s University Club, I pay $30 per month in membership fees. Online Resources. Please answer all the questions. Because sunk costs cannot be recovered, they are irrelevant for future decision-making. b) II only. B) resources are being used inefficiently. C)economic profit is maximized. 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. the additional benefit of buying an additional unit of a product. d) I and III only. B)total revenue equals total opportunity cost. Positive because price exceeds average variable costs. 8. Which of the following statements about opportunity costs is TRUE? 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. C) curve that is bowed outward if increasing opportunity costs exist. (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. d) All of the above were relevant. C) there are opportunities to find ways to reduce costs. 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). 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 B)$150. You can resell your Kanye ticket for $80. C)marginal benefit. For example, a student may have to choose between doing A levels and going for a diploma right after finishing O levels. C)the monetary costs of an activity. 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. 12. Suppose that you are willing to pay $350 to see Leonard Cohen play at the Save-On-Foods Arena. Web Links. The wants of human beings are unlimited. Market-based transfer prices should be reduced by any costs avoided by selling internally rather than externally. 8) Economics involves marginal analysis because: A) marginal benefits always exceed marginal costs. c) Taking actions whenever the marginal benefit exceeds the marginal cost. 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. Multiple Choice Quiz. For an individual, it may involve choosing the best from the choices available. 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. Tags: Question 8 . Creative Commons Attribution 4.0 International License. Describe the opposing views of public choice. 35-D Opportunity cost is the benefit of next best alternative forgone. This will mean that if we choose more of one thing, we will have to have less of something else. c) III only. 36-B Basic economic problem arises from limited resources and unlimited wants. Which of the following statements about opportunity cost is TRUE? b. real costs. increase even though his explicit costs would rise, because he would now be free to earn $20/hour giving banjo lessons. B. a cost that cannot be avoided. Which of the following statements about opportunity cost is TRUE? Cost incurred due to shortage of stock is known as _____ a. Imputed cost b. 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. D)$180. B. a cost that cannot be avoided. c) II only. 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. Suppose that you are willing to pay $20 to see a movie on Saturday night. (A) opportunity cost (B) utility (C) marginal cost (D) scarcity 28. b. government regulation. When idle capacity exists, there is no opportunity cost to producing intermediate products for another division. The cost of the dinner is $20 and you value the experience of having dinner with your friend at $60. Topic 1: Introductory Concepts and Models. 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. 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? 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