ECON MACRO
5th Edition
ISBN: 9781337000529
Author: William A. McEachern
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 1.2P
To determine
The
Concept Introduction:
The value of the best alternative forgone when one chooses an item or activity is known as opportunity cost. It also means the loss incurred by choosing one particular item or activity. The opportunity cost of any item should be lower to gain the maximum utility from selecting that item. However, the opportunity cost is subjective means it could mean different for different individuals. Since the hours in a day or the days in a week are fixed, one can only alternate their options to lower their opportunity cost. The opportunity cost also changes based on different circumstances.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
You have 5 kids and work 2 jobs to help support your family. You work a day job from 8:00 am to 4:00 pm Monday through Friday. You also cut hair at one of the local barber shops on Saturdays and Sundays. On Saturdays you normally work from 7:00 am to 7:00 pm and make pretty good money because the shop is always full on the weekends. Your wife is concerned that you are not spending enough time with the children because you work all of the time. Using production possibilities analysis, show a situation where you decide to increase the amount of time on Saturdays that you hang out with the kids from 2 to 5 hours.
Store
Travel Time Each Way
Price of a Suit
(Minutes)
(Dollars per suit)
Local Department Store
15
102
Across Town
30
88
Neighboring City
60
65
Juanita makes $42 an hour at work. She has to take time off work to purchase her suit, so each hour away from work costs her $42 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 computing the opportunity cost of Juanita's time and the total cost of shopping at each location.
Store
Opportunity Cost of Time
Price of a Suit
Total Cost
(Dollars)
(Dollars per suit)
(Dollars)
Local Department Store
102
Across Town
88
Neighboring City
65
Only typed answer
Barney decides to quit his job as a corporate accountant, which pays $11,000 a month, and goes into business for himself as a certified public accountant.
He runs his business from his converted garage apartment, which he could rent out for $305 a month if he wasn’t using it as a home office. He must purchase office supplies worth $70 a month, and his monthly electricity bill has increased by $50 now that he is working out of his home office.
After six months of working from home, Barney has earned an average of $19,000 per month.
Instructions: Enter your answers as a whole number.
a. What are Barney’s monthly explicit costs?
$
b. What are Barney’s monthly implicit costs?
$
c. What are Barney’s monthly economic costs?
$
Knowledge Booster
Similar questions
- Store Travel Time Each Way (minutes) Price of a Skirt (Dollars per skirt) Local Department Store 15 103 Across Town 30 87 Neighboring City 60 64 Juanita makes $16 an hour at work. She has to take time off work to purchase her skirt, so each hour away from work costs her $16 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 computing the opportunity cost of Juanita's time and the total cost of shopping at each location. Store Opportunity Cost of Time Price of a Skirt Total Cost (Dollars) (Dollars per skirt) (Dollars) Local Department Store 103 Across Town 87 Neighboring City 64arrow_forwardIdentify three categories of opportunity costs that you will incur for getting a university degree. (10 points)arrow_forwarde Travel Time Each Way Price of a Suit (Minutes) (Dollars per suit) Local Department Store 15 102 Across Town 30 88 Neighboring City 60 65 Juanita makes $42 an hour at work. She has to take time off work to purchase her suit, so each hour away from work costs her $42 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 computing the opportunity cost of Juanita's time and the total cost of shopping at each location. Store Opportunity Cost of Time Price of a Suit Total Cost (Dollars) (Dollars per suit) (Dollars) Local Department Store 102 Across Town 88 Neighboring City 65arrow_forward
- Assignment One Topic: Farm fertilizer In 2019 the Dutch Parliament decided they were going to arbitrarily close 50% of their livestock farms. Soon after this, the Canadian Government was rumored to be on the verge of implementing an extremely large tax on Farm fertilizer used (upwards of 35-40% depending on where you looked). Assume they do go ahead with this rumored idea, what happens next, what is the fallout in the Economy and how will it impact you? Is this a good idea? The tools you need to analyse this question can be found in the first half of your textbook and there are plenty of articles online about the questionarrow_forwardNEWS WIRE OPPORTUNITY COST North Korea's Rockets Deepen Food Crisis North Korea has spent a lot of money on its nuclear and rocket programs. A single launch of an ICBM missile costs around $1.3 billion. Since taking power in 2011, Kim Jong-un authorized over 20 rocket launches, including ICBMs, beginning in January 2017. Those launches came at a great cost to the Korean people. The cost of just one ICBM launch could have been used to purchase 5 million tons of corn, for example. That would have been of enormous benefit to the Korean people, who have suffered decades of widespread poverty and periodic starvation. Source: News accounts of December 2012 January 2017. According to the News Wire, what is the opportunity cost of a single ICBM rocket launch in terms of corn for each of North Korea's 26 million people? ton(s) of corn per personarrow_forwardQuestion 12 and 13 do u work only Full explain this question and text typing work only thanksarrow_forward
- Looking for some help on these practice problems so I can prepare for my test coming up, please let me know if you can help. Thank you very mucharrow_forwardPlease no written by hand solutions Jack paid $13.75 to buy 3 slices of pizza and 4 hot dogs at a concession stand. Sarah paid $9.75 to buy 2 slices of pizza and 3 hot dogs from the same concession stand. What was the price of a slice of pizza?arrow_forwardNote: I really need help with the last question, and the table please! The answer should be typed.arrow_forward
- opportunity cost of producing a product from zeroarrow_forward#10 Can you show me how to do this?arrow_forwardPlease no written by hand Budget Selections to Build Demand As a commuter you have a budget of $250 to spend on gasoline each month. You drive a car that gets 20 miles per gallon (MPG). You can purchase 100 gallons of gasoline per month at the current price of $2.50 per gallon. Demand Schedule Price Quantity Commuting Errands Mp Social Activities Vacations $2.50 97.5 Drive Alone (700 miles) Small Trips as Needed (550 miles) Trips to City (350 miles) Out-of-State (350 miles) $3.00 Current price: $3.00/gallon Car Pool (425 miles) 2x per week (300 miles) Trips to Local Park (120 miles) In-State (200 miles) Add to schedule Previous $3.50 Public Transportation (60 miles) Next 1 Trip per Week (150 miles) Stay in Neighborhood (40 miles) > Stay-cation (50 miles) $4.00 QUANTITY 35 27.5 17.5 17.5 97.5 gallons Keynote $4.50 COST $105.00 $82.50 $52.50 $52.50 $292.50 of $250arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education