Possibility A B C D Entertainment (E) (units) 90 60 30 0 Consider the above PPF. What is the opportunity cost of 1 unit of good food as the island moves from possibility A to possibility B? 30 units of entertainment 3/2 units of entertainment Good food (F) (units) 0 20 30 35 O 2/3 units of entertainment O 1/3 units of entertainment

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…

5. Opportunity cost and production possibilities Raphael is a skilled toy maker who is able to produce both trucks and kites. He has 8 hours a day to produce toys. The following table shows the daily output resulting from various possible combinations of his time. Choice Hours Producing Produced (Trucks) (Kites) (Trucks) (Kites) A 8 0 4 0 B 6 2 3 10 C 4 4 2 16 D 2 6 1 19 E 0 8 0 20   On the following graph, use the blue points (circle symbol) to plot Raphael's initial production possibilities frontier (PPF). ( attached image)       Suppose Raphael is currently using combination D, producing one truck per day. His opportunity cost of producing a second truck per day is( 1, 3, 16, 19 kites) per day.   Now, suppose Raphael is currently using combination C, producing two trucks per day. His opportunity cost of producing a third truck per day is ( 1,6,10, or 16 kites)   per day.   From the previous analysis, you can determine that as…

5. Opportunity cost and production possibilities Sam is a talented artist who sells hand-crafted goods on his website. Sam currently crafts and sells both crochet hats and pillows. He spends 8 hours a day working on crafts. The following table gives different daily output scenarios depending on how much of his time is spent on each good. Choice A B C D E PILLOWS 30 25 20 On the following graph, use the blue points (circle symbol) to plot Sam's initial production possibilities frontier (PPF). 15 10 5 0 Hours Crafting Produced (Crochet hats) (Pillows) (Crochet hats) (Pillows) 0 0 9 15 17 18 0 8 6 4 2 0 1 2 3 2 4 6 8 4 5 CROCHET HATS 4 3 2 6 1 0 7 8 Initial PPF A New PPF (?)

None

Typed answer.

1. Google provides Gmail users with 15GB of "free" storage. Is it really free? If not, what are the costs and who pays them? 2. Theoretically, users who reach their limit also have a third option: they can switch to a different email provider. Why might people be unwilling to do that? 3. Consider the opportunity cost of users' time associated with spending several hours to delete thousands of emails. If a user is willing to spend 2 hours per week deleting emails to avoid spending $2 per month for storage, what does that say about the value a user places on their leisure time? Is that rational?

13_Economics