If There Is No Scarcity

question 18

Multiple Choice

If there is no scarcity,

• A) the opportunity cost of an action would be greater than its sunk cost.
• B) an action would have zero opportunity cost.
• C) choices are no longer rational.
• D) marginal cost of an action is greater than its marginal benefit.
• E) all marginal benefits would equal zero.

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Definitions:

Bid-Ask Spread

The difference between the highest price that buyers are willing to pay for an asset and the lowest price that sellers are willing to accept.

Commission Income

Revenue earned by an individual or company for facilitating a transaction or service, often a percentage of the transaction value.

Price Continuity

The concept that securities should have consistent pricing through time without large gaps or discontinuities.

Stop-Loss Order

A buy or sell order for a stock or other security set at a specified price level, meant to limit an investor's loss on a security position.