Question

improves efficiency at the expense of equality Which of the folloying is an out-of-pocket expense of attending college but not an opportun cost? ) room and board ome uition all theAbove noré of the D 5) Econol nists assume that people act out of self-interest. Which of the following is most consister that assumption? ■ People ignore the effects of their decisions on others. O People are concerned with the effects of their decisions on others to the extent that the reactions of others might have consequences for themselves. People are selfish and always 'use others to advance their own interests. None of the other answers is correct People treat the interests of others in the same way that they treat their own interests. 5) The economist says to undertake any activity (2ps) as long as the marginal benefit exceeds the merginal cost that is legal and that provides satisfaction ■ just until the total benefit equals the total cost. Dfor which there are no externalities a for which the total benefit exceeds the total coat. 7) Economists believe that (2pts)

Answer 1

4) All of the above.

Opportunity costs include explicit costs ( out-of-pocket costs), as well as, implicit costs.

Explicit costs require actual money payment like tuition, room and board. Implicit costs do not require money payment, salary foregone.

5) None are true. When economists refer to people acting in their self-interest, it means that people take decisions which make them better off and does not mean they act selfishly.

6) As long as marginal benefit exceeds marginal cost. Decisions are made at the margin.

7) Both parties benefit from mutually agreed terms of trade.