Econ: Macmillan HW CH.1

Classify each scenarios as an "either-or" decision or a "how much" decision A. After graduation from law school, Frank is offered one job in chicago and another in New York. Where should Frank work? B. Bella is accepted to four graduate school programs. Where should she go to school? C. Jake needs to stay awake while he studies for his midterm tomorrow. What quantity of coffee should jake drink? D. Marvin arrives at his favorite buffet to eat chinese food. Sometimes, he overeats and leaves the buffet with a stomach ache

"Either-Or" A, B Marginal Decision C,D

Table shows total cost and total benefit for weekly empanada sales at La Cucharita Colombian Bakery # of Emp. Total Cost Total Benefit (Revenue) 0 200 0 100 300 305 200 450 610 300 650 915 400 950 1220 500 1350 1525 600 1850 1830 700 2450 2135 800 3050 2440 1. What will profits on empanadas be if they dont sell any empanadas? 2. How many empanadas should La Cucharita make if they want to maximize their profits? 3. If the bakery chooses to produce the profit-maximizing quantity, what will its profits be?

1. -200 2. 400 3. 270

A bakery owner is considering hiring an additional employee to increase daily output. The bakery currently employs three workers and produces 500 loaves of bread per day. By hiring a fourth worker, the bakery would be able to produce a total of 560 loaves of bread each day. Suppose each loaf of bread can be sold for $3. The fourth worker would need to be paid $100 each day that person worked. The additional baking supplies used by this fourth worker each day would cost $30. 1. The marginal cost of the fourth woker is $ 2. The marginal benefit of hiring the fourth worker is $ 3. Should the bakery owner hire a fourth worker? A. No, because the marginal benefit exceeds the marginal cost B. Yes, because the marginal cost exceeds the marginal benefits C. Yes, because the marginal benefit exceeds the marginal cost D. No, because the marginal cost exceeds the marginal benefit

1. 130 2. 180 C. Yes, because the marginal benefit exceeds the marginal cost

You have paid $100 for student season tickets to the football games at your university. It is halfway through the season, and the team has not won any games. You are considering whether you will attend any future games this season. All of the following are costs or benefits you should consider when making this decision EXCEPT the ____ A. $100 you spent on the season ticket B. Time spent to go to the game instead of studying C. Satisfaction you will get if your team wins a game D. $5 you can make per game by selling your remaining tickets

A. $100 you spent on the season ticket

Andre plays pickleball three nights a week, and his current grade in economics is 85 percent.He decides to play for a fourth night each week, and his economic grade falls to 78 percent. The marginal cost to Andre of playing pickleball one more night each week is A. 7 percentage points B. 78 percentage points C. 85 percentage points D. Greater than 78 percentage points and less than 85 percentage points

A. 7 percentage points

It is a rainy day, and you are considering taking an Uber one mile to meet some friends. You have decided you are willing to pay $20 to avoid getting wet from the rain. The trip would normally cost you $8, but due to the weather the surcharge is triple the regular cost. You should _____ because the benefit to you of taking the Uber is _____ than the cost. A. Walk; less B. Walk; more C. Take an Uber; less D. Take an Uber; more

A. Walk; less

You just moved into your new apartment, which has washer and dryer hookups, but your aprtment complex doesn't provide washers and dryers. You don't want to go to a laundromat. You can rent a washer and dryer set from an appliance rental company for $30 per month. Alternatively, you could buy a set $1,100, which you could sell after one year for $700, or $600 after two years. You plan to stay in this apartment for two years, since it's near your job. Should you buy or rent the set? A. You should rent the set because renting earns $40 worth of economic surplus B. You should rent the set because renting earns $400 worth of economic surplus C. You should buy the set because renting earns $220 worth of economic surplus D. You should buy the set because renting earns $500 worth of economic surplus

C. You should buy the set because renting earns $220 worth of economic surplus

The marginal cost of an additional worker is: A. Always equal to the cost from the first worker hired B. Always equal to the benefit of hiring the additional worker C. The total cost of all workers hired D. The additional cost of hiring one more worker

D. The additional cost of hiring one more worker

Which demonstrates a scenario with no opportunity cost? A. It is a Friday night and you stay up talking to your friends B. The chemistry club is giving out free pizza for lunch to all who come to their meeting to get it. C. Naomi decides to buy a Wizard book instead of buying a textbook she might never open D. Two 5 star french restaurants both offer the same salary. You're estatic because both are a win-win no matter which one you choose E. All of these are considered opportunity cost

E. All of these are considered opportunity cost

The city council is deciding whether or not to build a new stadium. Which descriptions are sunk costs and should therefore not be a part of their decision? A. The cost of the previous stadium B. The cost of labor for building a new stadium C. The cost of destroying the old stadium to make room for new one D. The cost of last year's renovation of the old stadium

Sunk Cost: A. The cost of the previous stadium D. The cost of last year's renovation of the old stadium Not a Sunk Cost: B. The cost of labor for building a new stadium C. The cost of destroying the old stadium to make room for new one

Suppose you and a friend are playing a game online. After two rounds, your friend says she has to go study for an exam tomorrow and will see you later. Using the rational rule, explain your friend's decision. The Marginal Cost of the rule: A. Third round was greater than the marginal benefits of the third round B. First round was greater than the marginal benefits of the second round C. Second round was greater than the marginal benefits of the third round D. Third round was greater than the marginal benefits of the second round

A. Third round was greater than the marginal benefits of the third round

Alan 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 must decide whether to eat the dinner he prepared or walk to campus to meet his friends at the dining hall. Alan should consider all of these costs when making the decison EXCEPT the: A. Time he spent cooking the dinner B. Time it will take to walk, meet his friends, and walk back C. Amount of money he will spend at the dining hall D. Value he places on eating dinner with his friends

A. Time he spent cooking the dinner

Over the summer, you decide to take summer school, which precludes you from working at your usual summer job that earns you $7000 over the summer. Your summer school tuituion is $2000, textbooks are $400, and room and board are $3,500. The opportunity cost of attending summer school is A. $7000 B. $12900 C. $5900 D. $2000

B. $12900

What best describes the use of the marginal rule? A. Considering what you must give up when a decision is made B. Breaking down a choice into a series of smaller choices and comparing the additional cost and additional benefits each action C. Breaking down a choice into a series of smaller choices and comparing the total costs and total benefits of an action D. Pursing the course of action that maximizes society's well-being

B. Breaking down a choice into a series of smaller choices and comparing the additional cost and additional benefits each action

Using the rational rule in conjunction with the marginal principle allows a decision-maker to A. Assess the dependencies between your own choices B. Maximize their economic surplus C. Assess your dependency on you and the market, which jointly determine the price of a slice or pizza D. Minimize their economic surplus

B. Maximize their economic surplus

Sunk Costs are costs that are incurred: A. If a particular decision is made. B. Regardless of which decision is made. C. Only for some decisions. D. If a particular decision is not made.

B. Regardless of which decision is made.

Sunk cost are cost that: A. Are potential costs associated with a particular decision. B. Are part of the opportunity costs of a decision. C. Are incurred in the past and cannot be reversed. D. Should be considered in any decision

C. Are incurred in the past and cannot be reversed.

Following the rational rule, the maximum economic surplus occurs when: A. Total benefits equal total costs B. Total benefits exceed total costs C. Marginal benefits equal marginal costs D. Marginal benefits exceeds marginal costs

C. Marginal benefits equal marginal costs

Rose's parents have booked and paid for a family trip to Aspen, Colorado, during her spring break. Rose's friends recently decided to drive to Destin, Florida, for spring break. Rose needs to decide whether to join her parents in Aspen or drive to the beach with her friends. The opportunity costs of joining her friends on the trip to Destin include each of these EXCEPT: A. Her parents' anger if she skips the family trip to Aspen. B. Her contribution to gas money for the drive to Destin. C. The ski lift ticket her parents have already purchased for her. D. The hotel costs she will split with her friends in Destin.

C. The ski lift ticket her parents have already purchased for her.