Answer:

6). Answer:

False

The opportunity cost includes both explicit and implicit costs.

7). Answer:

iii- marginal

A rational consumer will purchase additional quantities of a good or service as long as the MARGINAL utility exceeds the opportunity cost because consumer wants to maximize total utility.

8). Answer:

iii- should not

In the budget constraint framework, sunk costs __SHOULD NOT______ be factored into current decisions because it is done in present and focus on most choices in the real world and sunk cost is past cost that could not be covered.

9). Answer:

True

The production possibilities (PPF) model shows an inverse relationship between the amount of two production options - for example, health care and education because have limited resources for production. Production of one goods or services may increase only if the production of the other goods and services decrease.

10). Answer:

ii- decline.

The law of diminishing returns states that as additional increments of resources are devoted to a certain purpose, the marginal benefit from those additional investments will decline.