smartwork5 homework ch 1
What might be a microeconomic response to inflation?
A company reduces the size of its workforce.
Which of the following is an example of a microeconomic issue?
A retailer decides to hire 1,000 new employees in the United States as part of its expansion program.
microeconomic
Value Petrol lowers the prices of all grades of gasoline in response to a newly opened competitor. Mika negotiates a long-term contract for capital equipment for her property management business.
You have always thought that learning to play the guitar would be fun. However, this activity would cost money and require time away from other activities. This situation best exemplifies:
trade-offs
The United States has the ability to produce more textiles and more semiconductors than Vietnam. However, the United States chooses to import textiles because the opportunity cost of producing textiles in _____ is ____ than in the United States
vietnam / lower
incentives
The additional $600 that the government added to weekly unemployment benefits.
Like a good economist, you calculated the full cost of getting your college degree. Suppose that at your university, you will pay $10,000 each year for tuition, $2,000 each year for textbooks, and $12,000 per year for room and board. Before you left for college, your boss at your high-school job offered you a job paying $20,000 per year. Assume that if you decided not to go to college, your parents would not let you live at home. What is your full cost for four years of college?
$128,000 4 × ($10,000 + $2,000 + $20,000) = $128,000 --- don't include living costs bc you would have to pay for those either way
Buying and selling textbooks are two separate decisions made at the margin. Textbooks create value both when they are bought and when they are sold. Think about your decision to buy the textbook for this course. You paid $225 for the book, but you would have been willing to pay $400 to use the book for the semester. Suppose that at the end of the semester you could keep your textbook or sell it back to the bookstore. Once you have completed the course, the book is worth only $70 to you. The bookstore will pay you 50% of the original $225. How much total value have you gained?
$217.50 (400 - 225) + (112.5 which is 50% of original price - 70)
Deltra was willing to purchase a dozen cookies for $80 that Deirdre was willing to sell for anything more than $42. If they agreed on a price of $46, how much total value was created in this exchange?
$38 (80 - 46) + (46 - 42)
Sam has two options this weekend. He could work at his job and earn $9 per hour for three hours, or he could go to a concert for that three hours. A ticket for the event costs $30.What is the FULL cost (opportunity + financial) of the event?
$57
Loretta spent 6 hours studying for an exam, and she received an A on the exam. Normally, she would have spent that time watching TV instead of studying. Loretta figures she could have made a B after studying only 3 hours, but she really wanted an A. What is Loretta 's marginal cost in terms of TV viewing to move from a B to an A on the exam?
3 hours
trade-offs
Spending $2.2 trillion on the CARES Act instead of spending the money on 440 new NFL stadiums.
positive incentives
The government offers a tax credit for donating to recognized charities Your instructor offers extra credit for attending an event outside of class A reward offered for the return of a lost item
Opportunity cost
The next-best alternative to the $2.2 trillion for the CARES Act was spending the money on a new infrastructure project.
macroeconomic
The unemployment rate has decreased for the second consecutive quarter. Inflation was fueled by an increase in rent and energy prices.
The opportunity cost of attending college is likely to be highest for a high school graduate
who can immediately take over the family business.
negative incentives
your instructor institutes an attendance policy that drops your grade if you miss more than two classes The government taxes the sale of cigarettes A parking ticket given for parking in a no-parking zone
