Econ T1 Assignments

For which of the following individuals would the opportunity cost of going to college be highest?

a famous, highly-paid actor who wants to take time away from show business to finish college and earn a degree

When an economy is operating at a point on its production possibilities frontier, then

there is no way to produce more of one good without producing less of the other.

A tradeoff is

a constraint that requires giving up one thing to get another.

Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that the opportunity cost of 1 table is

6 chairs for Ken and 3 chairs for Traci

Missouri can produce 10,000 tons of pecans per year or 5,000 tons of pears per year. Washington can produce 12,000 tons of pecans per year or 48,000 tons of pears per year. Which of the following statements about opportunity cost is correct?

The opportunity cost of a ton of pears is 2 tons of pecans per ton of pears for Missouri and 1/4 ton of pecans per ton of pears for Washington. AND The opportunity cost of a ton of pecans is 1/2 ton of pears per ton of pecans for Missouri and 4 tons of pears per ton of pecans for Washington.

Suppose an economy only produces two goods, robots and ice cream. Last month, the economy produced 10 robots and 200 gallons of ice cream. This month, the same economy produced 15 robots and 240 gallons of ice cream. Which of the following statements could explain this change?

This month, the economy reduced the unemployment of its resources. AND This month, the economy experienced an improvement in technology. AND This month, the economy experienced an increase in resources

Any point on a country's production possibilities frontier represents a combination of two goods that an economy

can produce using all available resources and technology.

The production possibilities frontier

depicts the boundary between those combinations of goods and services that can be produced and those that cannot given resources and the current state of technology.

The production possibilities frontier is

downward sloping and reflects tradeoffs in choices.

A society that is producing on its production possibilities frontier is

fully utilizing all of its productive resources.

In one day, Sue can change the oil on 20 cars or change the tires on 20 cars. In one day, Fred can change the oil on 20 cars or change the tires on 10 cars. Sue's opportunity cost of changing oil is ________ than Fred's and her opportunity cost for changing tires is ________ than Fred's.

greater; less

The nation's production possibilities frontier is bowed outward. Suppose that the government decides to increase the production of armaments by $20 billion, and that as a result the output of consumer goods falls by $20 billion. If a further $20 billion increase beyond the initial $20 billion increase in armaments output is sought, we can expect that the output of consumer goods and services will fall further by

more than $20 billion.

Most students attending college pay tuition and are unable to hold a full-time job. For these students, tuition is

part of the opportunity cost of going to college. So are their forgone earnings from not holding a full-time job.

Melody decides to spend three hours working overtime rather than going to the park with her friends. She earns $20 per hour for overtime work. Her opportunity cost of working is

the enjoyment she would have received had she gone to the park.

A rational decision maker takes an action if and only if

the marginal benefit of the action exceeds the marginal cost of the action.

Barb's aunt gave her $100 for her birthday with the condition that Barb buy herself something. In deciding how to spend the money, Barb narrows her options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally she decides on Option B. The opportunity cost of this decision is

the value to Barb of the option she would have chosen had Option B not been available.

The opportunity cost of an item is

what you give up to get that item