The opportunity cost of receiving ten dollars in the future as opposed to getting that ten dollars today is:
  • The foregone interest that could be earned if you had the money today
Scarce resources are ultimately allocated toward the production of goods most wanted by society because:
  • Firms attempt to maximize profits
Which of the following signals to the owners of scarce resources are the best uses of those resources?
  • Profits of businesses
Which of the following is an implicit cost to a firm that produces a good or service?
  • Foregone profits of producing a different good or service
If the interest rate is 10% and cash flows are $1,000 at the end of year one and $2,000 at the end of year two, then the present value of these cash flows is?
  • $2,562