Managerial economics weeks 1-6

Which of the following is the best example of opportunity cost? Select one: a. a company's expenditures on a training program for its employees b. the rate of return on a company's investment c. the amount of money that a company can earn by depositing excess funds in a money market fund d. the profit that a company forgoes when it decides to drop one product line in favor of another one - ANS d. the profit that a company forgoes when it decides to drop one product line in favor of another one Opportunity cost is best defined as Select one: a. the amount given up when choosing one activity over all other alternatives. b. the amount given up when choosing one activity over the next best alternative. c. the opportunity to earn a profit that is greater than the one currently being made. d. the amount that is given up when choosing an activity that is not as good as the next best alternative. - ANS b. the amount given up when choosing one activity over the next best alternative. The best definition of economics is Select one: a. how choices are made under conditions of scarcity. b. how money is used. c. how goods and services are produced. d. how businesses maximize profits. - ANS a. how choices are made under conditions of scarcity. The economic concept of "opportunity cost" is most closely associated with which of the following management considerations? Select one: a. market structure b. resource scarcity c. product demand d. technology - ANS b. resource scarcity Suppose you play a round of golf costing $75. The golf takes four hours to play. If you were not playing golf you could be working and earning $40 per hour. The opportunity cost of your golf game is: Select one: a. 75 b. 235 c. 155 d. 160 - ANS d. 160 Suppose you paid $300 to take an economics course, which meets 30 times for one hour a class, during the course of the semester. Instead of attending class, you could have either work as a cleaner for $5 an hour or waited tables for $8 an hour. Given this information, the opportunity cost of attending each class session is: Select one: a. 30 b. 8 c. 5 d. 13 - ANS b. 8 Suppose you find £20. If you choose to use the £20 to go to a football match, your opportunity cost of going to the game is: