Econ 2301 HW 1
Who bears these costs: the users of electricity or the owners of power plants, or both the users and the owners?
Costs are borne by owners of coal-fired power plants who must find ways to decrease carbon emissions. The users of electricity might also face a cost if they must pay for electricity that is produced at a higher cost than electricity generated by coal
Jurassic World had world-wide box office receipts of $1.66 billion. The movie's production budget was $150 million with additional marketing costs. A successful movie brings pleasure to millions, creates work for thousands, and makes a few people rich. What are some of the components of marginal cost and marginal benefit that the producer of a movie faces?
The marginal cost of an activity is the change in the total cost that results from a one-unit increase in the activity. The cost hiring the crew for an additional day is a component of the marginal cost faced by the producer.
Your school has decided to increase the intake of new students next year. In reaching its decision, would the school use the "economic way of thinking" and make its decision at the margin? Your school would use the "economic way of thinking" and make its decision at the margin by checking that ____________________..
Your school would use the "economic way of thinking" and make a rational choice. The school's rational choice uses the school's available resources to best achieve the objective of the school. The school would make its decision at the margin by comparing the school's marginal benefit from an additional student and its marginal cost of an additional student. The school would increase the number of students as long as the net benefit from an additional student was positive
The following list gives examples of incentives that government policies use to influence behavior. A. Cash rewards for reporting crimes B. An invitation to a sport's team to have lunch at the White House C. Fines for littering the highway D. Community service for bullying in school Complete the table by classifying each item in the list as a "carrot" incentive or a "stick" incentive, and as a "monetary" incentive or "non-monetary" incentive.
Carrot Monetary A B Stick Non-monetary C D
Jurassic World had world-wide box office receipts of $1.66 billion. Suppose that Chris Pratt, the leading actor, had been offered a part in another movie and that to hire him for Jurassic World, the producer had to double his pay. Chris Pratt might have had ________ incentive to make Jurassic World and the movie producer might have had an incentive to ______ .
An incentive is a reward or a penaltylong dasha "carrot" or a "stick"long dashthat encourages or discourages an action. The higher pay would have increased Chris Pratt's incentive to make Jurassic World instead of the other movie. The higher pay is a "carrot" that encourages his participation in Jurassic World. The higher pay is a "carrot" to the producer to manage the budget by reducing the budget for supporting actors
If a storm warning is in effect for the World Series game, the marginal benefit from attending the ball game will ______, so the incentive to attend the ball game will _________.
An incentive is a reward that encourages an activity or or a penalty that discourages an activity. So if a storm warning is in effect for the World Series game, the marginal benefit from attending the ball game will fall and the incentive to attend the ball game will weaken.
Obama unveils major climate change policy Obama's Clean Power Plan, which will set federal limits on carbon emissions from coal-fired power plants, will cost $8.4 billion and reap benefits of more than $34 billion. But opponents of the plan say it will drive up the cost of electricity for millions of Americans. Source: CNN, August 3, 2015 What are the $8.4 billion of costs arising from using less coal to produce electricity?
Because of the decision to limit carbon emissions, more electricity will be produced by power plants that are not coal fired. So the $8.4 billion of costs arising from using less coal to produce electricity include the loss of jobs in the coal sector and higher production costs incurred by producing electricity using higher-cost inputs than coal
Read Eye on the Benefit and Cost of School and explain why both you and Clayton Kershaw made the right decision. Choose the statement that is incorrect.
It is true that the costs of a college education are incurred today while the benefits accrue in the future, but a method exists to compare today's costs and future benefits.
Jurassic World had world-wide box office receipts of $1.66 billion. The movie's production budget was $150 million with additional marketing costs. A successful movie brings pleasure to millions, creates work for thousands, and makes a few people rich. What are some of the components of marginal cost and marginal benefit that the producer of a movie faces?
Marginal benefit from an activity is the increase in total benefit that results from one-unit increase in the activity. When a movie producer produces one more movie, the increase in reputation as a movie producer that reults is a component of the marginal benefit from being the producer
Pam, Pru, and Pat are deciding how they will celebrate the New Year. Pam prefers to take a cruise, is happy to go to Hawaii, but does not want to go skiing. Pru prefers to go skiing, is happy to go to Hawaii, but does not want to take a cruise. Pat prefers to go to Hawaii or to take a cruise but does not want to go skiing. Their decision is to go to Hawaii. Is this decision rational?
People make a rational decision by comparing marginal benefit and marginal cost. The key here is the marginal benefit from doing something together. If Pam's, Pru's, and Pat's marginal benefit from a trip together to Hawaii exceeds its marginal cost, their decision to go to Hawaii is rational even though two of them would have preferred to do something else.
REI is paying its employees to take Black Friday, Thanksgiving off REI, the outdoor gear and apparel retailer, is paying employees to celebrate Thanksgiving 2015 by spending Black Friday outdoors with their families. Source: Sustainable Brands, October 28, 2015 Do you think that REI workers will shop or spend the day with family? REI workers will spend the day _______.
REI workers will make a rational choice. People make a rational choice when they undertake an activity in which the marginal benefit from the activity exceeds the marginal cost of the activity. That is, the rational choice is one in which the net benefit from the activity is positive. So the rational choice of REI workers is to spend the day shopping if the marginal benefit from shopping exceeds the marginal cost of shopping.
The more than $34 billion of benefits from using less coal to produce electricity _______ . Obama's Clean Power Plan, which will set federal limits on carbon emissions from coal-fired power plants, will cost $8.4 billion and reap benefits of more than $34 billion. But opponents of the plan say it will drive up the cost of electricity for millions of Americans
The benefit from something is the gain or pleasure that it brings. If less coal is used to produce electricity, carbon emissions will decrease and the air will be cleaner. And with breathing cleaner air, people's health will improve.
Pam, Pru, and Pat are deciding how they will celebrate the New Year. Pam prefers to take a cruise, is happy to go to Hawaii, but does not want to go skiing. Pru prefers to go skiing, is happy to go to Hawaii, but does not want to take a cruise. Pat prefers to go to Hawaii or to take a cruise but does not want to go skiing. What is the benefit from the trip that each gets?
The benefit from the trip is the gain that each person gets from the trip. The benefit that each person gets from the trip is the pleasure, relaxation, excitement and knowledge gained from being in Hawaii together.
The benefits are received by the __________ Obama's Clean Power Plan, which will set federal limits on carbon emissions from coal-fired power plants, will cost $8.4 billion and reap benefits of more than $34 billion. But opponents of the plan say it will drive up the cost of electricity for millions of Americans
The benefits are received by users of electricity and owners of power plants because everyone will benefit from cleaner air.
Which of the following items are components of the opportunity cost of being a full-time student? -The things the student would have bought with a higher income -A college meal plan -A subscription to the Rolling Stone magazine -The income the student will earn after graduating
The opportunity cost of something is the best alternative that must be given up to get it. The opportunity cost of being a full-time student includes all the things you would have been able to enjoy with the income earned if you were not in school. The opportunity cost does not include the meal plan because you eat whether you are in school or not. The opportunity cost does not include the subscritpion to the Rolling Stone magazine because you would have taken out the subscription even if you were not in school The opportunity cost does not include the income you will earn on graduation; That is a benefit of being in school.
Pam, Pru, and Pat are deciding how they will celebrate the New Year. Pam prefers to take a cruise, is happy to go to Hawaii, but does not want to go skiing. Pru prefers to go skiing, is happy to go to Hawaii, but does not want to take a cruise. Pat prefers to go to Hawaii or to take a cruise but does not want to go skiing. What is the opportunity cost of the trip to Hawaii for each of them?
The opportunity cost of the trip to Hawaii is the best alternative forgone. For Pam and Pat, that best alternative is a cruise. For Pru, it is skiing.
