"The Resources Now Going into the War on Terrorism and into Improved

question 191

Multiple Choice

"The resources now going into the War on Terrorism and into improved airport security would save more lives if they were invested in medical research." This statement most clearly reflects which of the following?

• A) The best test of an economic theory is its ability to predict.
• B) There is no such thing as a free lunch--the use of scarce resources always has an opportunity cost.
• C) selfishness; if people were not selfish, we could have more of everything.
• D) The value of goods can be determined objectively.

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Definitions:

Dysfunctional Competition

A harmful form of rivalry among businesses that may involve unethical practices, leading to reduced efficiency and harm to consumers or the industry.

Teamwork

The collaborative effort of a group to achieve a common goal or complete a task in the most effective and efficient way.

Imputed Interest Rate

An estimated interest rate used to calculate the present value of future cash flows, when no explicit interest rate is provided.

Residual Income

Income that remains after all costs and expenses, including the cost of capital, have been subtracted from net revenues.