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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

Suppose Alphonso’s town raises the price of bus tickets from Chapter 2, Problem 19CTQ, Suppose Alphonso’s town raises the price of bus tickets from to and file price of burgers rises from , example  1 to Chapter 2, Problem 19CTQ, Suppose Alphonso’s town raises the price of bus tickets from to and file price of burgers rises from , example  2 and file price of burgers rises from Chapter 2, Problem 19CTQ, Suppose Alphonso’s town raises the price of bus tickets from to and file price of burgers rises from , example  3 to Chapter 2, Problem 19CTQ, Suppose Alphonso’s town raises the price of bus tickets from to and file price of burgers rises from , example  4 Why is file opportunity cost of bus tickets unchanged? Suppose Alphonsn’s weekly spending money increases from Chapter 2, Problem 19CTQ, Suppose Alphonso’s town raises the price of bus tickets from to and file price of burgers rises from , example  5 to Chapter 2, Problem 19CTQ, Suppose Alphonso’s town raises the price of bus tickets from to and file price of burgers rises from , example  6 How is his budget constraint affected from all three changes? Explain.

To determine

The opportunity cost when the bus tickets price rises from $.50 to $1 and the price of burgers also rises from $ 2 to $ 4.

Explanation

It is evident that the most consumers do have a minimum and a limited amount of income which can be spending on the things which they need and want. In the problem when the town Alphonso rises its weekly spending from $10 to $ 20 and can use to buy bus tickets or to buy the burgers, it needs to judiciously allocate its funding. The burgers rise from $2 to $ 4 each while the bus tickets have risen from 50 cents each to $ 1.

In here the opportunity costs of bus tickets is defined as a number of burgers which needs to be given up in order to purchase one more bus ticket. Initially the price of bus tickets also raise from 50 cents per trip, which made the opportunity cost to be calculated at a 0.52/2 = .25 burgers.

In here, the initial price of one burger ($2) costs which is equivalent to the four bus tickets ($-0.50) that made up the opportunity cost of a burger which costs from a four bus tickets, and eventually making the opportunity cost of a bus ticket to a ...

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