Economics (7th Edition) (What's New in Economics)
7th Edition
ISBN: 9780134738321
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 2, Problem 2.1.11PA
To determine
Issue in the opportunity cost and trade-off.
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Suppose the U.S. president is attempting to decide whether the federal government should spend more on research to find a cure for heart disease. He asks you, one of his economic advisors, to prepare a report discussing the relevant factors he should consider. Use the concepts of opportunity cost and trade-offs to discuss some of the main issues you would deal within your report.
Consider your decision to read this textbook on economics. Identify which of the four core principles of economics (the cost benefit principle, the opportunity cost principle, the marginal principle, or the interdependence principle) is most relevant for the following aspects of that decision.
Reading this textbook will help establish a solid foundation for understanding concepts you will learn in more advanced economics courses.
Reading this textbook will require time and effort, but doing so will help you improve your grade in this course.
The time you will spend reading this textbook could instead be used to study for your chemistry exam.
Each extra page that you read and each practice problem that you complete will help you increase your understanding of the material.
a) Trade-offs are important part of economic decision making. You are supposed to Analyze and explain any three trade-offs that you face in your life.
b) You plan to study on weekend and your friends ask you to go to a farm house with them. What do you think is the true cost of spending your weekend on a farmhouse with friends?
c) You plan to spend your weekend working at your father’s superstore for a wage, but your friends ask you go play cricket at the weekend. What do you think is the true cost of spending your weekend playing cricket with friends?
Chapter 2 Solutions
Economics (7th Edition) (What's New in Economics)
Ch. 2 - Prob. 1TCCh. 2 - Prob. 2TCCh. 2 - Prob. 2.1.1RQCh. 2 - Prob. 2.1.2RQCh. 2 - Prob. 2.1.3RQCh. 2 - Prob. 2.1.4PACh. 2 - Prob. 2.1.5PACh. 2 - Prob. 2.1.6PACh. 2 - Prob. 2.1.7PACh. 2 - Prob. 2.1.8PA
Ch. 2 - Prob. 2.1.9PACh. 2 - Prob. 2.1.10PACh. 2 - Prob. 2.1.11PACh. 2 - Prob. 2.1.12PACh. 2 - Prob. 2.1.13PACh. 2 - Prob. 2.1.14PACh. 2 - Prob. 2.2.1RQCh. 2 - Prob. 2.2.2RQCh. 2 - Prob. 2.2.3PACh. 2 - Prob. 2.2.4PACh. 2 - Prob. 2.2.5PACh. 2 - Prob. 2.2.6PACh. 2 - Prob. 2.2.7PACh. 2 - Prob. 2.2.8PACh. 2 - Prob. 2.2.9PACh. 2 - Prob. 2.2.10PACh. 2 - Prob. 2.2.11PACh. 2 - Prob. 2.2.12PACh. 2 - Prob. 2.2.13PACh. 2 - Prob. 2.2.14PACh. 2 - Prob. 2.2.15PACh. 2 - Prob. 2.3.1RQCh. 2 - Prob. 2.3.2RQCh. 2 - Prob. 2.3.3RQCh. 2 - Prob. 2.3.4RQCh. 2 - Prob. 2.3.5RQCh. 2 - Prob. 2.3.6RQCh. 2 - Prob. 2.3.7PACh. 2 - Prob. 2.3.8PACh. 2 - Prob. 2.3.9PACh. 2 - Prob. 2.3.10PACh. 2 - Prob. 2.3.11PACh. 2 - Prob. 2.3.12PACh. 2 - Prob. 2.3.13PACh. 2 - Prob. 2.3.14PACh. 2 - Prob. 2.3.15PACh. 2 - Prob. 2.3.16PA
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- One of the lessons of economics is that “there is no such thing as a free lunch.” This means that businesses, consumers, and whole societies face trade-offs whenever they make a decision. Please draw on your own experiences to discuss the following three items. Make sure you use economic concepts in your main contribution. Explain a decision that you have made at work, or one concerning your career, or any major life decision that you have made. Identify and explain the trade-offs that you faced. List the alternatives you had, identify the highest valued alternative, and explain your final decision to the class.arrow_forwardEconomics is all about trade offs. What is the opportunity cost for a typical student pursuing a college degree? Is it rational for some people to decide to NOT continue their formal education past high school? Explain using economic reasoning.arrow_forwardMany people think that soda consumption also leads to increased obesity. Many schools have banned the sale of soda in vending machines. Use the idea of opportunity costs to explain why some people think these bans will reduce consumption. Do you agree?arrow_forward
- Suppose you spend five hours studying for your final exam. In the first hour, you manage to review five pages of notes. In the second hour, your understanding of the first five pages allows you to cover seven additional pages. In the third hour, you cover five additional pages. In the fourth hour, you cover only two pages. By the fifth hour, you are so tired that you start to confuse yourself with what you have learned. Which economic concept best illustrates what you have just experienced? a. Law of diminishing returns b. Production function c. Short run d. Economic efficiencyarrow_forwardFor each of the following, indicate how you might apply the four core principles of economics (the cost benefit principle, the opportunity cost principle, the marginal principle, or the interdependence principle). You are considering whether you should vote in the next election. You watch a beautiful sunset from the back porch of your home. Should you major in economics or philosophy? Should you and your spouse purchase a second vehicle?arrow_forwardDefine scarcity, choice, and opportunity cost and explain how they are related and why they are so essential in the study of economics.arrow_forward
- Introduction to the Production Possibilities Curve (PPC) As you know, the basic economic problem is scarcity. Since we do not have enough scarce resources to satisfy everyone's needs and wants, we all have to make choices. We must choose how to spend our time, our energy, our money, and our material possessions, and for every choice that is made, a cost is suffered. The relationship between choice and cost can be shown in a graph called a production possibilities curve, or PPC. For example, consider a student who has 4 hours of free time in the evening. He or she can choose to spend some, all, or none of those 4 hours studying for a test the following day. He or she could also use the time to catch up on sleep. These choices can be graphed: Choice A - spend all 4 hours studying Choice B- spend 2 hours studying, and 2 hours getting extra sleep Choice C- spend all 4 hours sleeping Of course, other combinations of the 4 hours exist. The student could study for 3.5 hours, and get an extra…arrow_forwardWhat is an Opportunity Cost in economics? Answer by giving an example.arrow_forwardSuppose your friend ask you to go watching a movie while you are studying for an examination. what would be the opportunity cost of watching the movie? Explain your answer.arrow_forward
- Using an economic point of view, please describe and explain the following two situations: Describe how you might determine the economically efficient number of exit doors on an airline, or the economically efficient number of safety marshals assigned to an airline flight. In 1938, the FDA was given the authority to require drug manufacturers to test and prove the safety of their product before distribution. What are some opportunity costs of this decision?arrow_forwardSuppose that your tuition to attend college is $10,000 per year and you spend $4,000 per year on room and board. If you were working full time, you could earn $20,000 per year. What is your opportunity cost of attending college for one year? A) $14,000 B) $24,000 C) $30,000 D) $34,000 can you solve this Q and show me the steps for solving itarrow_forwardTonight, you and your friends are planning to see Black Panther for which you have a $4 off coupon. Without the coupon, the ticket is $10. Once you are at the cinema, your friends now want to see Captain Marvel. Both movies start and end at the same time. Assume that you have nothing else to do. If you decide to see Captain Marvel with your friends, what is your opportunity cost?arrow_forward
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