Question

1. Suppose that, instead of taking chopping wood, Jack could either have gotten a quick job and earned income or partied with his countryside friends. His opportunity cost of chopping wood is most accurately described below as:
   1. forgone chopped wood.
   2. forgone party.
   3. forgone income.
   4. forgone income and partying.
   5. forgone income or partying, depending on which was his next best choice.
2. What happens to the benefit of milking old Joe as the amount of an activity is increased?
   1. Total benefits remain constant.
   2. Marginal benefit increases.
   3. Marginal benefit remains constant.
   4. Marginal benefit decreases.
   5. The marginal benefit changes only if the marginal cost changes.
3. If Jack and his mother decided to specialize in producing one good, the opportunity cost of that good would increase because:
   1. resources are not equally productive in all activities.
   2. of what must be paid to resources increases.
   3. Jack and his mother’s wants are virtually unlimited.
   4. all country goods are not equally valuable.
   5. the profit from its production must rise as more of a good is produced.

Answer 1