Going skiing will cost Adam 80 a day. He also loses 40 per day in wages because he has to take time off from work. Adam still decides to go skiing.
A) His decision is rational if Adam's marginal benefit of spending a day skiing is greater than his marginal cost.
B) The 80 price of skiing is not an opportunity cost and so did not affect Adam's decision.
C) He loses a total of 120 per day, so his decision is irrational.
D) Adam's lost 40 per day in wages is not an opportunity cost and so did not affect his decision.
E) Adam is definitely making a decision that is in the social interest.
Question 2
All of the following are ground rules government can establish to help markets function well except
A) competition.
B) honesty.
C) information.
D) collusion.
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