my name
CHAPTER 1
WHAT IS ECONOMICS?
PROBLEM SET
1. a. Critical assumption. Finding the fastest route depends upon being able to avoid as many traffic lights as possible.
b. Simplifying assumption. No city is completely flat, but minor hills and valleys would not significantly affect the speed of traffic across Boston.
c. Critical assumption. If you cannot easily transfer from one highway to another, what seems to be the shortest route could end up being quite long.
d. Critical assumption. Other things equal, the shorter the route, the faster the travel time. It is important to be able to roughly determine the length of a route by using map distances.
2. Kylie’s opportunity cost at College #1 = $1,036 + $18,000 = $19,036, at College #2 = $1,077+ $18,000 = $19,077, and at College #3 = $1,054+ $18,000 = $19,054. Based solely on opportunity cost, Kylie will choose College #1 because, even though her scholarship there is smallest, so is her opportunity cost of attending.
3. The opportunity cost of playing the computer game all weekend is the sacrifice of the Colorado ski trip, since that is the alternative that is the next most attractive to you.
4. a. The average opportunity cost of attending a year of college at a 2-year public college = explicit costs + implicit costs = ($2,402 + $1,036) + $18,000 = $21,438.
b. The average opportunity cost of attending a year of college at a 2-year public college = explicit costs + implicit costs = $1,036 + $18,000 = $19,036.
c. The average opportunity cost of attending a year of college at a 2-year public college = explicit costs + implicit costs = ($2,402 + $1,036) + $9,000 = $12,438.
Note that we get $9,000 by assuming that the student can still work full time over the summer as well as half-time during the 9 months of the school year, t hereby foregoing only $18,000/2.
5. a. Yes; capital
b. Yes; capital
c. Yes; labor
d. Yes; capital
e. Yes; capital
f. Yes; land
g. No
h. Yes, capital (human capital)
i. Yes,
WHAT IS ECONOMICS?
PROBLEM SET
1. a. Critical assumption. Finding the fastest route depends upon being able to avoid as many traffic lights as possible.
b. Simplifying assumption. No city is completely flat, but minor hills and valleys would not significantly affect the speed of traffic across Boston.
c. Critical assumption. If you cannot easily transfer from one highway to another, what seems to be the shortest route could end up being quite long.
d. Critical assumption. Other things equal, the shorter the route, the faster the travel time. It is important to be able to roughly determine the length of a route by using map distances.
2. Kylie’s opportunity cost at College #1 = $1,036 + $18,000 = $19,036, at College #2 = $1,077+ $18,000 = $19,077, and at College #3 = $1,054+ $18,000 = $19,054. Based solely on opportunity cost, Kylie will choose College #1 because, even though her scholarship there is smallest, so is her opportunity cost of attending.
3. The opportunity cost of playing the computer game all weekend is the sacrifice of the Colorado ski trip, since that is the alternative that is the next most attractive to you.
4. a. The average opportunity cost of attending a year of college at a 2-year public college = explicit costs + implicit costs = ($2,402 + $1,036) + $18,000 = $21,438.
b. The average opportunity cost of attending a year of college at a 2-year public college = explicit costs + implicit costs = $1,036 + $18,000 = $19,036.
c. The average opportunity cost of attending a year of college at a 2-year public college = explicit costs + implicit costs = ($2,402 + $1,036) + $9,000 = $12,438.
Note that we get $9,000 by assuming that the student can still work full time over the summer as well as half-time during the 9 months of the school year, t hereby foregoing only $18,000/2.
5. a. Yes; capital
b. Yes; capital
c. Yes; labor
d. Yes; capital
e. Yes; capital
f. Yes; land
g. No
h. Yes, capital (human capital)
i. Yes,