PRIN MACROECON LL+CNCT+SMARTBOOK
6th Edition
ISBN: 9781260580792
Author: Frank
Publisher: MCG CUSTOM
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Chapter 1, Problem 5RQ
To determine
Explain whether the tuition fee is a sunk cost.
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Joanne has just completed high school and is trying to determine whether to go to junior college for two years or go directly to work. Her objective is to maximize the savings she will have in the bank five years from now.
If she goes directly to work, she will earn $22,000 per year for each of the next five years. If she goes to junior college, for each of the next two years she will earn nothing—indeed, she will have to borrow $6,000 each year to cover tuition and books. This loan must be repaid in full three years after graduation. If she graduates from junior college, in each of the subsequent three years, her wages will be $41,000 per year. Joanne’s total living expenses and taxes, excluding tuition and books, equal $15,000 per year.
Instructions: Enter your responses as whole numbers.
a. Suppose, for simplicity, that Joanne can borrow and lend at 0 percent interest. On purely economic grounds, should she go to junior college or work?
After 5 years, the total value of…
Suppose that before you began your college application process, you were offered a job to work as a floor-trainer at a local climbing gym, accompanied by a yearly salary of $30,000 (after taxes). Assume however that you decided to turn down this offer and instead attend a year of college. The total monetary cost of the year of college, including tuition, fees, and room and board expenses, is $42,000.
You likely chose to attend college because
Q25. In the solution of the game, does Victor ask Hermione to go to the Yule ball?
Yes
No
Q26. In the solution of the game, does Hermione say yes to Victor?
Yes
No
Q27. In the solution of the game, does Ron ask Hermione to go to the Yule ball?
Always
Yes, unless Victor asked first
Yes, unless Hermione said yes to Victor
Never
Q28. In the solution of the game, does Hermione say yes to Ron?
Yes, always
Only if Victor didn't ask first
Only after Victor asks first
Never
Chapter 1 Solutions
PRIN MACROECON LL+CNCT+SMARTBOOK
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