A.The Opportunity cost of an action is equal to:

1.Its Implicit cost

2.Its Explicit cost

3.Its explicit cost minus its implicit cost

4.The sum of its explicit and implicit costs

B.Suppose Joe is trying to decide whether to buy a latte at a nearby coffee shop or make a cup of coffee at home. Joe would get $5 worth of value from the latte, and the price of a latte at the coffee shop is $3. Joe would get $2.50 worth of value from a cup of homemade coffee, and it would cost him $1 to make. What is the opportunity cost to Joe of buying a latte at the coffee shop?

1.$3

2.$4.50

3.$5.50

4.$4.00

C.Suppose Joe is trying to decide whether to buy a latte at a nearby coffee shop or make a cup of coffee at home. Joe would get $5 worth of value from the latte, and the price of a latte at the coffee shop is $3. Joe would get $2.50 worth of value from a cup of homemade coffee, and it would cost him $1 to make. How much economic surplus would Joe get from buying a latte at the coffee shop?

1.$2

2.$1.50

3.$0.50

4.-0.50