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Microeconomics

Question in Microeconomics

26) Money spent on one product cannot be used on another product, so the brain reacts in a negative way to the thought of spending money. This is consistent with the principle of A) marginal utility. B) diminishing returns. C) opportunity cost. D) voluntary exchange. 26) self-control and have relatively 27) Cognitively active consumers tend to exercise dorsal-lateral prefrontal cortexes. A) more; inactive B) less, inactive C) less, active D) more; active 28) A person with a low level of glucose is more likely to: A) make an impulsive decision. B) base decisions on both gut feelings and cognition. C) make a cognitive decision D) avoid gut feelings. 29) 29) Nudges are A) incentives for people to voluntarily do things that are good for them that they might not otherwise do B) subsidies to avoid work C) reduced fines and taxes for doing the wrong things D) coerced and forced actions that may benefit a person. 30) 30) An example of a nudge is A) people being fined for littering B) new employees being automatically enrolled in a company's health care plan rather than having to enroll themselves C) people being subsidized for driving electric cars D) people receiving a tax break for not polluting.

Answer 1

Answer for question number 26 is opportunity cost.

Opportunity cost is what a person sacrifices when they chose one option over another. These costs are similar to Imputed cost and which does not involve any cash outlay.

Opportunity Cost Formula and Calculation

Opportunity cost = Return on best Foregone option - Return on chosen option

Hence the regret of the person not to spend money on another product is opportunity cost for that person.