Briefly explain the concept of opportunity cost. What is the ...

[dollx]

Briefly explain the concept of opportunity cost. What is the opportunity cost of attending college?
 
  What will be an ideal response?

Question 2

If the government wishes to correct the existence of positive externality, it could
 
  A) grant subsidies to consumers to stimulate demand.
  B) impose a tax on the producers to stimulate supply.
  C) impose taxes on consumers to stimulate demand.
  D) grant subsidies to producers to reduce supply.

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Answer to Question 1

The opportunity cost of an action is the value of the next best alternative that a person has to give up when making a choice. The opportunity cost of attending college is what the college student would give up by going to school, such as the income she could have earned if she did not go to school.

Answer to Question 2

A

[dollx]

Correct answers!

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