Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
20th Edition
ISBN: 9780078021756
Author: McConnell, Campbell R.; Brue, Stanley L.; Flynn Dr., Sean Masaki
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 1DQ
To determine
The opportunity cost and its relevance to economics.
Expert Solution & Answer
Explanation of Solution
Since the opportunity cost is the next best alternatives, it is the given up benefit in order to obtain some other benefits.
Resources are scarcely available to satisfy the human needs. The reason is that the human needs are unlimited. The resources can be used for different purposes.
For example, Land is limited in availability and assumes that the land is used for cultivating of wheat and rice. If the land is used to cultivate wheat, then rice production has to been given up from that particular land. Thus, the scarcity of resource creates the opportunity cost. If available resources are enough to satisfy the human needs, then there is no opportunity cost.
The revenue generated from the land located at the center of New York City, is greater than the revenue generated from the land that located at suburb. If the mall is build, then it can generate more revenue than the revenue generated from the parking lot. At the same time, the revenue generating from the mall that located at suburb is lower than the mall located at centre of the New York City. Thus, the opportunity cost of building a parking lot at New York City is greater than the building a parking lot at suburb.
Economics Concept Introduction
Concept introduction:
Opportunity cost: Opportunity cost refers to the given up benefits in the process of obtaining some other benefit.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Given the supply levels y1 and y2, a monopolistic firm's profit is defined as ∏(y1,y2)=p(y∗1)+p(y∗2)−c(y1+y2)∏(y1,y2)=p(y1∗)+p(y2∗)−c(y1+y2).
Question 22Select one:
True
False
Based on the statements below, the function represents:
u;(x) is individual i's utility from overall
allocation x.
n
W = Σa;u;(x) with each a; > 0.
i=1
O a. The social welfare function
O b. The weighted-sum social utility function
○ c. The utilitarian social utility function
d. The minimax social utility function
If all individuals’ preferences are complete, reflexive, and transitive, then so should be the social preference created by the voting rule.
Question 5Answer
True
False
Chapter 1 Solutions
Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) - Standalone book
Ch. 1.2 - Prob. 1QQCh. 1.2 - Prob. 2QQCh. 1.2 - Prob. 3QQCh. 1.2 - Prob. 4QQCh. 1.A - Prob. 1ADQCh. 1.A - Prob. 2ADQCh. 1.A - Prob. 3ADQCh. 1.A - Prob. 1ARQCh. 1.A - Prob. 2ARQCh. 1.A - Prob. 1AP
Ch. 1.A - Prob. 2APCh. 1.A - Prob. 3APCh. 1.A - Prob. 4APCh. 1.A - Prob. 5APCh. 1.A - Prob. 6APCh. 1.A - Prob. 7APCh. 1.A - Prob. 8APCh. 1 - Prob. 1DQCh. 1 - Prob. 2DQCh. 1 - Prob. 3DQCh. 1 - Prob. 4DQCh. 1 - Prob. 5DQCh. 1 - Prob. 6DQCh. 1 - Prob. 7DQCh. 1 - Prob. 8DQCh. 1 - Prob. 9DQCh. 1 - Prob. 10DQCh. 1 - Prob. 11DQCh. 1 - Prob. 1RQCh. 1 - Prob. 2RQCh. 1 - Prob. 3RQCh. 1 - Prob. 4RQCh. 1 - Prob. 5RQCh. 1 - Prob. 6RQCh. 1 - Prob. 7RQCh. 1 - Prob. 1PCh. 1 - Prob. 2PCh. 1 - Prob. 3PCh. 1 - Prob. 4PCh. 1 - Prob. 5PCh. 1 - Prob. 6PCh. 1 - Prob. 7PCh. 1 - Prob. 8P
Knowledge Booster
Similar questions
- Based on the illustration below, the total quantities available for good 2 is: Answer: The endowment allocation is A @₁ = (2,4) and B @ · ' = (4,4).arrow_forwardEddie Clauer sells a wide variety of outdoor equipment and clothing. The company sells both through mail order and via the internet. Random samples of sales receipts were studied for mail order sales and internet sales, with the total purchase being recorded for each sale. A random sample of 7 sales receipts for mail order sales results in a mean sale amount of $81.10 with a standard deviation of $23.25. A random sample of 15 sales receipts for internet sales results in a mean sale amount of $64.30 with a standard deviation of $28.25. Using this data, find the 90 % confidence interval for the true mean difference between the mean amount of mail order purchases and the mean amount of internet purchases. Assume that the population variances are not equal and that the two populations are normally distributed. Step 1 of 3: Find the critical value that should be used in constructing the confidence interval. Round your answer to three decimal places.arrow_forwardDon't use ai to answer I will report you answerarrow_forward
- Please correct answer and don't used hand raitingarrow_forwardSolve the questions (Do not just write in words what to do) Thank you.arrow_forwardAn advertising executive claims that there is a difference in the mean household income for credit cardholders of Visa Gold and of MasterCard Gold. A random survey of 16 Visa Gold cardholders resulted in a mean household income of $75,650 with a standard deviation of $11,400. A random survey of 7 MasterCard Gold cardholders resulted in a mean household income of $68,280 with a standard deviation of $10,900. Is there enough evidence to support the executive's claim? Let μ₁ be the true mean household income for Visa Gold cardholders and μ2₂ be the true mean household income for MasterCard Gold cardholders. Use a significance level of a = 0.2 for the test. Assume that the population variances are not equal and that the two populations are normally distributed. Step 3 of 4: Determine the decision rule for rejecting the null hypothesis Ho. Round your answer to three decimal places.arrow_forward
- not use ai pleasearrow_forwardFor the two questions, use the provided Lorenz curve. Income 100% Lorenz curve If the economy's income were distributed according to the Equality line, what would the Gini coefficient be? 1 0 0.5 Infinity 80 60 60 60 10 40 If the economy's income were distributed according to the A line, how much of the economy's income is earned by the third quintile of families? 60% 40% 20% 100% 20 Equality 0 20% 40 40 A 50 60 80 100 Familiesarrow_forward1. For the following utility functions, (i) calculate the MRS, (ii) show whether the MRS is constant, or diminishing, or increasing, (iii) calculate the degree of homogeneity, (iv) check the convexity of the Indifference Curve using the condition that for a function to be strict quasi-concave, it must be that f2f11-2f1f2f12+ ff22 < 0, (v) based on MRS's characteristics, draw an approximate Indifference Curve, and (vi) comment on the type of utility function. (a) U(x, y) = 3x + y (b) U(x, y)=√√x y (c) U(x, y)=√√x + y (d) U(x, y)=xy x+yarrow_forward
- A 9R, where 1-b 1-b Question Two Consider the IS-LM Model. Let the IS equation be Y = (1b) is the marginal propensity to save, g is the investment sensitivity to interest rates, and A is an aggregate of exogenous variables. Let the LM equation be Y = +=R, where k and 1 are income and interest sensitivity of money demand, and Mo is real money balances. Mo k k It is given b = 0.7, g = 100, A = 252, k = 0.25, l = 200, and Mo 176. a) Utilize the given numbers to substitute the variables in the model, and then write down the IS-LM equation system in matrices form. b) Solve for the equilibrium values of Y and R using Cramer's Rule. (Note: Keep 2 digits after the decimal point.)arrow_forwardSuppose that a family's income is exactly the same as the poverty threshold. This family's income deficit would be and their ratio of income to poverty would be 130 0; 1 ○ 1 %3 030 Consider a family of four in 2008, whose poverty threshold is $22,024. If this family's total income was $16544, what would their income deficit be? Income deficit: $arrow_forward3. Based on the 'Compensation Wage Differentials,' (CWD) answers the next questions: In an economy where workers only have two options in their daily lives: work in firm 1 and be at home. The next equation gives the labour supply for the firm 1, Ls¹(w) = -40 + w. a) How much is it willing to pay worker number 10 to stay at home? b) If a new firm (firm 2) is hiring in this market, and its supply of labour is Ls²(w) = -80+ w. Which firm (1 or 2) is considered an ‘uncomfortable' workplace? c) What is the CWD for the firm considered an ‘uncomfortable' workplace when it wants to hire employee number 10? d) Two industries require workers with the same characteristics (skills and experience). Industry B is recognized as having much more hazardous working conditions than Industry A. What is the CWD between the two industries? Industry A Industry B Demand Supply 5 10 15 20 25 5 10 15 20 Labor (Hours) Labor (Hours) Demand Supplyarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
