Econ based off (quiz 1)
The opportunity cost of an item is
what you give up to get that item.
Suppose your college institutes a new policy requiring you to pay for a permit to park your car in a campus parking lot. How would this affect your opportunity cost of attending college?
The cost of the parking permit is part of the opportunity cost of attending college if you would not have to pay for parking otherwise.
Elena decides how to spend a $100 birthday gift between four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally, Elena decides on Option B. The opportunity cost of this decision is
the value of the option Elena would have chosen had Option B not been available.
Trade
allows specialization, which reduces costs.
Microeconomics is the study of
how individual households and firms make decisions.
Positive statements are
claims about how the world is.
Which of the following is an example of a positive, as opposed to a normative, statement?
Prices rise when the government prints too much money.
Which of the following is an example of a normative, as opposed to a positive, statement?
Universal healthcare would be good for U.S. citizens.
The marginal product of labor is defined as the change in
output per additional unit of labor.