1. Discuss the idea of an opportunity cost and think of three opportunity costs that you have made today

Suppose that an economy produces only 2 goods, beer and pizza. Show a typical production possibilities frontier for this country and use it to define and explain the opportunity cost concept and the concept of increasing opportunity costs. If a technology was invented that made the production of beer much more efficient but had no effect on the production of pizza how would the production possibilities frontier change (show it). While all points on the production possibilities curves maximize production, which point maximizes satisfaction? 1. With reference to a diagram, show and explain how a market, left on its own, will tend toward an equilibrium in which there is neither a surplus nor a shortage of the product. 1. What condition must be met in order to conclude that an economy is maximizing social well-being? Do the equilibriums given by individual markets necessarily lead to the maximization of social well-being (that is, if demand is equal to supply, can you conclude that…

Suppose Barry Wayne has a budget of $120 and is deciding between purchasing membership to Hulu which costs $40 and Netflix which costs $201. Graph the line that demonstrates your example. Be sure to label the y -axis, x - axis, line, and how to identify the opportunity cost in the graph. 2. Calculate the opportunity cost. 3. Show what will happen graphically if Barry Wayne lowers the budget from $120 to $80 4. Explain how the opportunity cost changes in your graph

Problem 1: Production Possibilities Frontier Consider an economy that produces bicycles and autos. The production possibilities schedule shown below denotes the points on the production possibilities frontier. Points Amount Bicycles Amount Autos A 10 B 8 D E 5 8 12 14 15 a) Draw the production possibilities frontier in a clearly labelled graph. You can assume the points on the frontier are connected by straight lines. Please put bicycles on the x-axis and autos on the y-axis. b) Is point E more efficient in production than point C? Explain. c) Based on this production possibility frontier, can the economy currently produce 8 bicycles and 10 autos? If not, explain what would need to happen to allow the economy to produce 8 bicycles and 10 autos. d) True/False/Uncertain (and explain): Point B more efficient in allocation than point A. e) Does this production frontier have increasing opportunity costs? Explain, and also explain why it is common for production frontiers to have increasing…

What is “Opportunity Cost”? You win $1000 in a basketball pool. You have a choice between spending the money now or putting it away for a year in a bank account that pays 5 percent interest. What is the opportunity cost of spending the $1000 now?

Use the following table to answer the question below.   Alexandra’s Production Possibilities Schedule Natalia’s Production Possibilities Schedule Number of Scarves Knitted per Day Number of Sweaters Knitted per Day Number of Scarves Knitted per Day Number of Sweaters Knitted per Day 0 4 0 4 3 3 2 3 6 2 4 2 9 1 6 1 12 0 8 0   What is Natalia’s opportunity cost of knitting a scarf?   Multiple Choice   3 sweaters   2 sweaters   1/3 of a sweater   1/2 of a sweater

Suppose Liam's Automotive,  a repair shop: offers two items: oil changes and tires.  With all employees working diligently, the shop can produce these combinations each hour. Type of Product:                        Production Alternatives                                                       A              B              C             D             E Oil Changes                              0                10             20           30          40 Tires.                                       80                60             40           35           0 Calculate the opportunity costs of moving from one point to each of the others (This is not a calculation provided in the text: What's the tradeoff?): Provide the answers after showing all work, and explain if theses costs are constant. What would it mean if the shop was actually doing 15 Oil Changes and 35 Tires? What would it mean if the shop was actually doing 35 Oil Changes and 35 tires?

1. Assume Jenny is trying to decide whether or not to see a movie. Why would she be more likely to focus on the $10 ticket price rather than the $20 she would fail to earn by not working during that time. 2. What is your opportunity cost of attending a 3pm class? Is it different than your opportunity cost of taking the same class at 8am? 3. Explain why there is always scarcity, even if there is a surplus in a particular market. 4. Match each of the following to one (or more) graphs below: a. Inefficient production of meat and fish b. Productive efficiency c. Technological advances in the production of meat and fish d. The law of increasing opportunity cost e. An unattainable combination of meat and fish

3. Evaluating opportunity costs Janet and Felix need to decide which one of them will take time off from work to complete the rather urgent task of changing the brakes on their car, Janet is pretty good at car repairs; she can change the brakes in 30 minutes. Felix is somewhat slow; it takes him 5 hours to change the brakes. Janet earns $160 per hour as a psychlatrist, while Felix earns $20 per hour as a cobbler. Keeping in mind that either Janet or Felx must take time off from work to change the brakes, who has the lowest opportunity cost of completing the task? O Janet and Felix face equal opportunity costs O Felix O Janet

2. Determining opportunity cost Juanita is deciding whether to buy a skirt that she wants, as well as where to buy it. Three stores carry the same skirt, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, Discounted price located 15 minutes away from where she works, and pay a Marked-up price marked-up price of $122 for the skirt: Juanita's office Original price Travel Time Each Way Price of a Skirt Store (Minutes) (Dollars per skirt) Local Department Store 15 122 Across Town 30 90 Neighboring City 60 78 Juanita makes $60 an hour at work. She has to take time off work to purchase her skirt, so each hour away from work costs her $60 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling. Complete the following table by…