Multiple-Choice questions:

1) What does the adage 'There is no such thing as a free lunch' mean?

a) To get something we like, we have to pay for it.

b) Even people on welfare have to pay for food these days.

c) Scare economic resources are required to produce the lunch.

d) All costs are measured in dollars.

2) Daniel decides to spend an hour playing cricket rather than working at $9 per hour. His trade-off is:

a) nothing, because he enjoys playing cricket more than working.

b) the increase in skill he obtains from playing cricket for that hour.

c) the $9 he could have earned.

d) nothing, because he spent $9 for admission into the sports complex to play cricket.

3) In economics, the cost of something is:

a) the out-of-pocket expense of obtaining it.

b) what you give up to get it.

c) always measured in units of time.

d) always higher than people think.

4) Opportunity cost is best defined as

a) the cost to producers that results from a failed investment opportunity.

b) the additional cost of producing one more unit of output.

c) the highest valued alterative that we forego when we make a choice or decision.

d) the additional cost of purchasing one more unit of a good.