Engineering Economy (16th Edition) - Standalone book
16th Edition
ISBN: 9780133439274
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Question
Chapter 1, Problem 1P
To determine
Decision making.
Expert Solution & Answer
Explanation of Solution
Total saving (S) from the trip can be calculated as follows.
Total saving after imposing the cost is $0.1673 per mile. If the cost of travel is less than the $0.1673 per mile, then the person can take the trip. The cost of gasoline for the travel is $1.25
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Edmund loves lollipops and hates oatmeal. To induce him to eat enough oatmeal and to restrain him from eating too many lollipops, his mum pays him 10 pence for every quart of oatmeal that he eats. The only way that he can get lollipops is to buy them at the sweet shop, where lollipops cost 5 pence each. Besides what he earns from eating oatmeal, Edmund gets an allowance of 10 pence per week. If he consumes only oatmeal and lollipops, and if his consumption bundles are graphed with quarts of oatmeal on the horizontal axis and lollipops on the vertical axis, then Edmund’s budget constraint has a slope of what?
Edmund loves lollipops and hates oatmeal. To induce him to eat enough oatmeal and to restrain him from eating too many lollipops, his mum pays him 10 pence for every quart of oatmeal that he eats. The only way that he can get lollipops is to buy them at the sweet shop, where lollipops cost 5 pence each. Besides what he earns from eating oatmeal, Edmund gets an allowance of 10 pence per week. If he consumes only oatmeal and lollipops, and if his consumption bundles are graphed with quarts of oatmeal on the horizontal axis and lollipops on the vertical axis, what is the value of the slope of edmund's budget constraint?
One type of systematic error arises because people tend to think of benefits in percentage terms rather than in absolute dollar amounts. As an example, Samir is willing to drive 20 minutes out of his way to save $4 on a grocery item that costs $10 at a local market. But he is unwilling to drive 20 minutes out of his way to save $10 on a laptop that costs $400 at a local store. In percentage terms, how big is the savings on the grocery item? On the laptop? In absolute terms, how big is the savings on the grocery item? On the laptop? If Samir is willing to sacrifice 20 minutes of his time to save $4 in one case, shouldn’t he also be willing to sacrifice 20 minutes of his time to save $10?
Chapter 1 Solutions
Engineering Economy (16th Edition) - Standalone book
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