Econ Assignment 2

With ATMs, it is possible to retrieve cash from the bank at any time. One hundred years ago, one could only get cash from the bank during business hours, say, 9 am to 3 pm. The present availability of 24-hour service has arisen because:

the cost of providing 24-hour service is much lower today.

For the fall semester, you had to pay a nonrefundable fee of $600 for your meal plan, which gives you up to 150 meals. If you eat 100 meals, your marginal cost of the 100th meal is:

$0

A firm pays Pam $40 per hour to assemble personal computers. Each day, Pam can assemble 4 computers if she works 1 hour, 7 computers if she works 2 hours, 9 computers if she works 3 hours, and 10 computers if she works 4 hours. Pam cannot work more than 4 hours day. Each computer consists of a motherboard, a hard drive, a case, a monitor, a keyboard, and a mouse. The total cost of these parts is $600 per computer. What is the marginal cost of producing the computers that Pam can assemble during her 3rd hour of work?

$1240

The following accompanying table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation), and only the CPU speeds listed below are available for purchase. CPU GHzTotal BenefitMarginal BenefitTotal CostMarginal Costs2.0$1,000 $900 2.5$1,400 $1003.0 $300$1,200 3.5$1,900 $1,500 4.0$2,000 $400 The marginal cost of upgrading from a 2.5GHz to 3.0GHz computer is:

$200

You have two options for how to spend the afternoon. You can either go see a movie with your roommate or work as a tutor for the Math Department. From experience, you know that going to see a movie gives you $20 worth of enjoyment, and with your student discount, a movie ticket only costs $12. If you spend the afternoon working as a math tutor, you will get paid $45. On a typical day, you wouldn't be willing to spend the afternoon working as a math tutor for less than $35. What is your opportunity cost of seeing a movie this afternoon?

$22

You won a free ticket to see the latest Star Wars movie this Friday night (which you can costlessly resell for its face value of $15). Your favorite band is also performing on Friday and is your only alternative activity. Friday is your last chance to see either the movie or the band. Tickets to see your favorite band cost $30, and on any given day, you would be willing to pay as much as $50 for a ticket. Based on this information, what is your opportunity cost of going to see the Star Wars movie on Friday?

$35

Refer to the accompanying table below. The average benefit of 2 units of activity is: Units of ActivityTotal CostTotal Benefit0$0$01$30$1002$40$1603$60$1904$100$2105$150$2206$210$225

$80

If Ana devotes all her time to making fudge, she can make 3 pounds of fudge an hour, and if she devotes all her time to making toffee, she can make 2 pounds of toffee an hour. If Leo devotes all his time to making fudge, he can make 4 pounds of fudge an hour, and if he devotes all his time to making toffee, he can make 5 pounds of toffee an hour. What is Leo's opportunity cost of making a pound of fudge?

1.25 pounds of toffee

Suppose it takes Dan 5 minutes to make a sandwich and 15 minutes to make a smoothie, and it takes Tracy 6 minutes to make a sandwich and 12 minutes to make a smoothie. What is the opportunity cost to Dan of making a sandwich?

1/3 of a smoothie

Frank owns an apple farm and plans to spend 4 hours today picking apples. The number of apples he can pick per hour depends on the total number of hours he spends working in either the east orchard or the west orchard in the manner shown in the accompanying table below. Hours in East OrchardNumber of Apples Per HourHours in West OrchardNumber of Apples Per Hour140110232210325310420410 What is the opportunity cost to Frank of spending an additional hour picking apples in the East orchard?

10

Lou and Alex live together and share household chores. They like to cook some meals ahead of time and eat leftovers. The accompanying table shows the number of rooms they can each clean and the number of meals they can each cook in an hour. Rooms Cleaned Per HourMeals Cooked Per HourLou54Alex33 For Alex, the opportunity cost of cleaning one room is making ______ meal(s); for Lou the opportunity cost of cleaning one room is making ______ meal(s).

1; 4/5

The accompanying table below shows the relationship between the number of times you get your car washed each month and your total monthly benefit from car washes. Each car wash costs $15. Number of Car Washes Per MonthTotal Monthly Benefit from Car Washes0$01$202$363$484$565$60 How many times a month should you get your car washed?

2

Refer to the accompanying table. Corey's opportunity cost of delivering of a pizza is making: Pizzas Made Per HourPizzas Delivered Per HourCorey126Pat1015

2 pizzas.

Refer to the accompanying table below. According to the Cost-Benefit Principle, how many units of this activity should be carried out? Units of ActivityTotal CostTotal Benefit0$0$01$30$1002$40$1603$60$1904$100$2105$150$2206$210$225

3

Refer to the accompanying table. Martha's opportunity cost of making of a pie is: Time to Make a PieTime to Make a CakeMartha60 minutes80 minutesJulia50 minutes60 minutes

3/4 of a cake.

Which of the following statements is true?

Comparative advantage does not require absolute advantage.

Dent 'n' Scratch Used Cars and Trucks employs 3 salesmen. Data for their sales last month are shown in this table: Cars SoldTrucks SoldLarry105Joe99Ralph312 Based on last month's data, ______ has an absolute advantage in selling cars and ______ has an absolute advantage in selling trucks.

Larry; Ralph

Your scholarship depends on your maintaining a 3.5 cumulative GPA. Your GPA for last semester was 3.6, which brought your cumulative GPA down. What must be true?

Last semester's grades were lower than your overall GPA.

Refer to the accompanying table. ______ has the comparative advantage in making pies and ______ the comparative advantage in making cakes. Time to Make a PieTime to Make a CakeMartha60 minutes80 minutesJulia50 minutes60 minutes

Martha; Julia

Suppose it takes Paul 3 hours to bake a cake and 2 hours to mow the lawn, and suppose it takes Tom 2 hours to bake a cake and 1 hour to mow the lawn. Which of the following statements is correct?

Paul has the comparative advantage in baking cakes.

The Incentive Principle is an example of:

a positive economic principle.

If a nation can produce a more computers per year than any other nation, that nation has a(n) ______ advantage in the production of computers.

absolute

If a nation has the lowest opportunity cost of producing a good, that nation has a(n) ______ in the production of that good.

comparative advantage

Refer to the accompanying table. Based on their comparative advantages, Pat should specialize in _______, and Corey should specialize in _______. Pizzas Made Per HourPizzas Delivered Per HourCorey126Pat1015

delivering pizza; making pizza

Suppose Karl divides his time between making birdhouses and growing artichokes. Karl's friend recently gave Karl some new woodworking tools that greatly reduced the amount of time it takes Karl to make each birdhouse, but the new tools had no impact on the amount of time it takes Karl to grow artichokes. Thus, the new tools _____ Karl's opportunity cost of growing artichokes.

increased Correct

The extra cost that results from carrying out one additional unit of an activity is the _____ of the activity.

marginal cost

The study of individual choice and its implications for the behavior of prices and quantities in individual markets is:

microeconomics

According to the accompanying table, Martha has the absolute advantage in making: Time to Make a PieTime to Make a CakeMartha60 minutes80 minutesJulia50 minutes60 minutes

neither pies nor cakes.

One thing that distinguishes normative economic principles from positive economic principles is that:

normative principles tell us how people should behave, and positive principles tell us how people will behave.

Jody has purchased a non-refundable $75 ticket to attend a Miley Cyrus concert on Friday night. Subsequently, she is asked to go to out dinner at no expense to her. If she uses cost-benefit analysis to choose between going to the concert and going out to dinner, the opportunity cost of going out to dinner should include:

only the entertainment value of the concert.