Concept explainers
Subpart (a)
Relevance of
Subpart (a)
Explanation of Solution
The opportunity cost of going home is lost the time that can be used for other purposes like studying.
Concept introduction:
Opportunity cost: Opportunity cost is the best alternative costs that forgo or give up when a decision or choice has to be taken.
Subpart (b)
Relevance of opportunity cost.
Subpart (b)
Explanation of Solution
Opportunity cost of riding bicycle 20 miles every day is alternative use of that time.
Concept introduction:
Opportunity cost: Opportunity cost is the best alternative costs that forgo, or give up, when a decision or choice has to be taken.
Subpart (c)
Relevance of opportunity cost.
Subpart (c)
Explanation of Solution
Opportunity cost of Federal government is value of other goods and services that the government can buy with that tax revenue.
Concept introduction:
Opportunity cost: Opportunity cost is the best alternative costs that forgo, or give up, when a decision or choice has to be taken.
Subpart (d)
Relevance of opportunity cost.
Subpart (d)
Explanation of Solution
The opportunity cost of foreign government is value of other goods and services that the government can buy with the subsidy amount.
Concept introduction:
Opportunity cost: Opportunity cost is the best alternative costs that forgo, or give up, when a decision or choice has to be taken.
Subpart (e)
Relevance of opportunity cost.
Subpart (e)
Explanation of Solution
Opportunity cost of upgrading balcony is alternative use of that money.
Concept introduction:
Opportunity cost: Opportunity cost is the best alternative costs that forgo, or give up, when a decision or choice has to be taken.
Subpart (f)
Relevance of opportunity cost.
Subpart (f)
Explanation of Solution
Opportunity cost of watching a game is the value of alternative use of time like studying, sleeping etc.
Concept introduction:
Opportunity cost: Opportunity cost is the best alternative costs that forgo, or give up, when a decision or choice has to be taken.
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Chapter 2 Solutions
MyLab Economics with Pearson eText -- Access Card -- for Principles of Microeconomics
- To the following questions, provide an answer that includes identifying the type of opportunity cost. 1. You have a ticket to go to a concert by one of your favorite groups, the Hives, which you cannot resell. However, you can buy a ticket for $30 to attend a talk by Steven Colbert, which is at the same time as the concert. You are willing to pay up to $90 to hear Colbert. Given that there are no other costs involved in attending either event, what is your opportunity cost of attending the Hives concert? 2. The common adage “There’s no such thing as a free lunch”3. A company buys a machine worth $500 that can be sold in one year for $400. Alternatively, the company can instead save the $500 at an annual interest rate of 5%. Discuss the opportunity cost of buying the machine.arrow_forwardExplain the following in not more than half a page Opportunity cost. Production possibility frontier. scarcityarrow_forwardAs the manager at a local florist, you supervise two employees, Anita and Jerome. There are two tasks that need to be completed: floral arrangements and flower delivery. It takes Anita 30 minutes to finish one floral arrangement and it takes her 40 minutes to make one delivery. It takes Jerome 10 minutes to finish one floral arrangement and it takes him 30 minutes to make one delivery. a. What are Anita and Jerome’s opportunity costs of making floral arrangements? What is each of their opportunity costs of making one delivery? b. Who has a comparative advantage in floral arrangements? What about deliveries? c. Suppose, initially, Jerome and Anita each spent 4 hours each day doing floral arrangements and 2 hours each day doing deliveries. If you changed their tasks so that each individual did nothing but the task for which they had a comparative advantage, how many more floral arrangements would your store make, and how many more deliveries?arrow_forward
- Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningEconomics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co