Chapter 1 HW

Gary Parker is willing to pay $700 for a new iPad. Apple (the producer of iPads) is selling a new iPad for $600. It costs Apple $400 to produce this iPad. How much economic surplus does Apple receive if Gary purchases this iPad? (a) $600 (b) $200 (c) $100 (d) $700

b

Marah is deciding whether or not to open a lemonade stand. She expects to sell 20 cups of lemonade for $1 per cup. She already made a sign that cost her $10 and will have $15 worth of additional costs for cups of lemonade mix if she decided to open to stand. If Marah decided to open the lemonade stand, how much profit will she earn?

$-5

Consider your decision to read this textbook on economics. Identify which of the four core principles of economics is most relevant for each aspect of that decision. "each page that your read and practice problem that you complete will help you increase your understanding of the material." This statement is related to the __________ principle.

Marginal

Sunk costs should ________ be considered as part of the opportunity costs of a decision (a) sometimes (b) always (c) never (d) rarely

c

Consider your decision to read this textbook on economics. Identify which of the four core principles of economics is most relevant for each aspect of that decision. "The time you will spend reading this textbook can also be used to study for your chemistry exam." This statement is related to the __________ principle.

opportunity

The five-dollar burger joint gift card that your friend gave you for your birthday expires today. You can either use the gift card to buy yourself dinner at burger joint, or you can stay home and eat a delicious home-cooked meal. What is the opportunity cost of eating the home cooked meal? (a)the vale of a five doller dinner at burger joint (b) the value of the ingredients that go into the home-cooked meal, and the value of a five dollar dinner at Burger Joint (c) there is opportunity cost since you did not pay for the gift card (d) the time it takes to eat your home cooked meal, and the value of the five dollar dinner at Burger Joint (e) the value of the ingredients that go into the home cooked meal

b

Marah is deciding weather or not to open a lemonade stand. She expects to sell 20 cups of lemonade for $1 per cup. She already made a sign that cost her $10 and will have $15 worth of additional costs for cups of lemonade mix if she decided to open to stand. Based on this information should Marah open the lemonade stand?

Yes

Consider your decision to read this textbook on economics. Identify which of the four core principles of economics is most relevant for each aspect of that decision. "Reading this textbook will require time and effort, but doing so will help you improve your grade in this course. " This statement is related to the ________ principle.

Cost-Benefit

Ivan inherited his mother's 1963 Chevrolet Corvette, which he values at $45,000. He decides that he might be willing to sell it, so he posts it on Craigslist for $55,000. Samantha is interested in and willing to pay up to $72,000 for one. ________willing to voluntarily engage in this exchange.

Ivan and Samantha are both

Marah is deciding weather or not to open a lemonade stand. She expects to sell 20 cups of lemonade for $1 per cup. She already made a sign that cost her $10 and will have $15 worth of additional costs for cups of lemonade mix if she decided to open to stand. The $10 spent on the sign represents what???

a sunk cost

Alan Patel is a college student living alone in a campus apartment. He finished cooking dinner when his friends text him to join them at the dining hall on campus for dinner He now decided weather to eat the dinner he prepared or walk to campus to meet his friends at the dining hall. Alan should consider all the following costs when making this decision EXCEPT the (a) time it will take to go meet his friends and walk back (b) amount of money he will spend at the dining hall (c) value he places on not eating dinner alone (d) money spent on the groceries he used to cook dinner

d

How is the economic surplus generated by a decision calculated? (a) it is the sum of costs arising from the decision (b) it is the total benefits minus the total costs arising from the decision (c) it is the total benefits plus total costs rising from the decision (d) it is the sum of benefits arising from the decisions

b

In economics, what is meant by "optimal decisions are made at the margin?" (a) the concept of the margin was initially developed in 2012 by Professor Marginus; research is still being done on how it can be used for decision-making (b) the idea of the margin is related to making decisions while thinking about the benefits and costs of small changes in behavior (c) the idea of margin is that all economic decisions are made at the very fringes of society (d) the idea of margin does not help compare trade-offs and is not relevant to decisions making

b

Which of the following is the best definition of the opportunity cost of a decision? (a) actual financial costs of a decision (b) benefits from the best forgone alternative (c) the difference between the benefits of the first and second best choices (d) the sum of all benefits from all foregone alternatives

b

Consider the following statement: "Economists always put things into monetary terms; as a result, economics can most appropriately be called the study of money" Is this statement true or false? (a) False, even though economists use money as a form of measurements, economics is better described as the study of financial markets (b) True, financial markets are the primary focus of economics (c) False, even though economics use monetary terms often, economics is better described as governmental approach to improving market outcomes (d) False, economists use monetary terms because they can be quantified and compared, but economics is better described as an approach to decision making

d

During the economic downturn of 2008-200, the unemployment rate increased to nearly 10%. At the same time, the price of college tuition and the number of college enrollees increased. Which statement best explains why more people enrolled in college during this time period even as the price of tuition increased? The core principal that best explains this is the ________

opportunity cost principle

Ivan inherited his mother's 1963 Chevrolet Corvette, which he values at $45,000. He decides that he might be willing to sell it, so he posts it on Craigslist for $55,000. Samantha is interested in and willing to pay up to $72,000 for one. How much economic surplus, if any, does Ivan gain from engaging in this exchange?

$10,000

Ivan inherited his mother's 1963 Chevrolet Corvette, which he values at $45,000. He decides that he might be willing to sell it, so he posts it on Craigslist for $55,000. Samantha is interested in and willing to pay up to $72,000 for one. How much economic surplus, if any, does Samantha gain from engaging in this exchange?

$17,000

Ivan inherited his mother's 1963 Chevrolet Corvette, which he values at $45,000. He decides that he might be willing to sell it, so he posts it on Craigslist for $55,000. Samantha is interested in and willing to pay up to $72,000 for one. How much total surplus, if any, is gained from this exchange?

$27,000

Madeline spends all of her spare money on widgets, which cost $2 each, and gizmos which cost $6 each. What is her opportunity cost if Madeline buys 12 widgets?

4

Consider your decision to read this textbook on economics. Identify which of the four core principles of economics is most relevant for each aspect of that decision. "Reading this textbook will help establish a solid foundation for understanding concepts you will learn in more advanced economic courses" This statement is related to the _______principle.

Interdependence

Juan McDonald is willing to pay $600 for a new iPad. Apple (the producer of iPads) is selling a new iPad for $700. It costs Apple $400 to produce this iPad. A voluntary economic transaction between Juan and Apple________ occur because______ would be better off due to the transaction. (a) will not; only Apple (b) will; neither Juan nor Apple (c) will; both Juan and Apple (d) will not; only Juan

a

During the economic downturn of 2008-200, the unemployment rate increased to nearly 10%. At the same time, the price of college tuition and the number of college enrollees increased. Which statement best explains why more people enrolled in college during this time period even as the price of tuition increased? Most people enrolled because (a)of the bandwagon effect. When something becomes popular or trendy, even more people are willing to pay high prices for it (b) of the social pressures, people feel to go to college. Universities exploited this and increased the price of tuition without losing many students (c) if the next best option was unemployment, many individuals may have preferred to enroll in college and gain new skills in hopes of increasing their future employment prospects. (d) if the next best option was unemployment, many individuals may have preferred to enroll in college and live off of student loans while waiting for the job market to improve

c

Rose Riley's parents have booked a family trip to Aspen, Colorado, during her spring break. They have agreed to pay for everything except her plane ticket. Rose's friends recently decided to drive to Destin, Florida, for spring break. Rose must now decide weather to join her parents in Aspen or drive to the beach with her friends. The opportunity costs of driving her parents in Aspen include each of the following except (a) the cost of her plane ticket to Aspen (b) memories she will miss with her friends (c) the stress of traveling via plane and navigating airports (d) the non-refundable deposit her friend paid for the beach house in Destin

d

The principle that your best choice depends on your other choices, the choices others make, developments in other markets, and expectations about the future is known as the _______ principle. (a) opportunity cost (b) marginal (c) cost-benefit (d) interdependence

d