ECON 40 Ch 2 HW

The U.S. economic system is:

A command and market mechanisms

3. Jacques has plans to go to a play and already has a $50 nonrefundable, nonexchangeable, and nontransferable ticket. Now Kyoko, whom Jacques has wanted to date for a long time, asks him to a party. Jacques would prefer to go to the party with Kyoko and forgo the play, but he doesn't want to waste the $$50 he spent on the play ticket. From the perspective of an economist, if Jacques decides to go to the party with Kyoko, what has he just done?

Correctly ignored a sunk cost

2. Deborah and Carlos need to decide which one of them will take time off from work to complete the rather urgent task of pruning their trees. Deborah is pretty good with a pole saw; she can prune the trees in 30 minutes. Carlos is somewhat slow; it takes him 5 hours to prune the trees. Deborah earns $130 per hour as a psychiatrist, while Carlos earns $25 per hour as a cobbler. Keeping in mind that either Deborah or Carlos must take time off from work to prune the trees, who has the lowest opportunity cost of completing the task?

Deborah

In a market system:

Households and firms make all economic decisions with minimal government regulation

In a command system:

Resources are directed and production is coordinated by the government

1. Suppose you've just won tickets to go see your favorite band. Unfortunately, the show is the same date as your little sister's birthday party. Assume you can't attend both the concert and the birthday party. This is an example of

a tradeoff