General equilibrium analysis is the study of
A) how an equilibrium is determined in all markets simultaneously.
B) how an equilibrium is determined in all closely related markets.
C) the effects of a change in a market, and all spillover effects in all related markets.
D) Any of the above.
Question 2
Sarah earns 40,000 per year working for a large corporation. She is thinking of quitting this job to work full time in her own business. She will invest her savings of 50,000 (which currently has an annual 10 rate of return) into the business. Her annual opportunity cost of this new business is
A) 0.
B) 40,000.
C) 45,000.
D) 90,000.
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