The Change in Total Cost,if One Alternative Is Implemented Instead

question 3

Multiple Choice

The change in total cost,if one alternative is implemented instead of another,is referred to as:

• A)incremental cost
• B)opportunity cost
• C)changing cost
• D)joint cost

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Definitions:

Inflation Rate

The rise in the cost of goods and services across an economy over a specific period, expressed as a percentage.

Potential GDP

An estimate of the maximum level of economic activity that an economy can sustain over the long term without increasing inflation.

Labor Force

Comprises all the working-age population that is employed and those unemployed but seeking employment.

Rational Expectations

The economic theory that assumes individuals make predictions about the future based on all available information and in a way that is systematically correct.