If You Own a Building and You Decide to Use

question 141

Multiple Choice

If you own a building and you decide to use that building to open a book store,

• A) there is no opportunity cost of using this building for a book store because you own it.
• B) there is an opportunity cost of using this building for a book store because it could have been used in other ways.
• C) the opportunity costs equal the cost of inventory.
• D) the only cost relevant to this decision is the price you paid for the building.

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Definitions:

Tax

A compulsory financial charge or other levy imposed by a government to fund public expenditures.

Demand Function

A mathematical representation showing the relationship between the quantity demanded of a good and its price, along with other factors affecting demand.

Supply Function

Represents the relationship between the quantity of a good that producers are willing to sell and the price of the good.

Quantity Supplied

The amount of a particular good or service that suppliers are willing and able to provide at a given price during a certain period.