Econ 202 Chapter 3 Homework

You are considering renting a city apartment with​ 1,000 square feet for ​$1,300 per month. The monthly rent on a​ larger, 1,500-square-foot city apartment is ​$1,750. The marginal cost of renting an apartment with 500 additional square feet is ​$___________ (just number) per square foot per month. ​

.9

You have the option to play tennis or a round of golf​ (but not​ both). The tennis match requires you to take 2 hours off from work and the round of golf requires you to take 4 hours off from work. Playing tennis has value to you equal to ​$40​, while golf has value to you equal to ​$115. Tennis courts are publicly available at no​ cost, but golf costs ​$40 per round. Suppose your wage from working is ​$88 per hour. The net benefit from playing tennis is ​$___________ and the net benefit from playing golf is ​$___________. ​Therefore, you should play ________ (tennis, golf)

24, 43, golf

You are a professor of economics at a university.​ You've been offered the position of serving as department​ head, which comes with an annual salary that is ​$9,500 higher than your current salary.​ However, the position will require you to work 200 additional hours per year. Suppose the next best use of your time is spending it with your​ family, which has value of ​$20 per hour. What is the difference in the net benefit from becoming the department​ head? The change in net benefit is ​$____________. ​(just number) To​ optimize, you ___________ (should/shouldn't) become a department head.

5,500, should

You are hired as a consultant for a local restaurant. It is considering whether to close at​ 9:00 p.m., stay open an extra hour​ (10:00 p.m.), or close earlier​ (8:00 p.m.). Based on wages and utility​ bills, the added cost​ (the marginal​ cost) of staying open for each additional hour is ​$482. If the additional revenue​ (the marginal​ revenue) during the last hour is ​$542​, the profit earned during the last hour of operation will be​ $ _____. If the additional revenue during the last hour is ​$382​, the profit earned during the last hour of operation will be​ $______. If the additional revenue​ (the marginal​ revenue) from staying open until 10.00 p.m. is ​$482​ the profit earned during the last hour of operation will be​ $________

60, -100, 0

If opportunity cost were to suddenly​ increase, total cost would A. decrease and net benefit would decrease. B. decrease and net benefit would increase. C. increase and net benefit would increase. D. increase and net benefit would decrease

increase and net benefit would decrease

When optimizing for total​ value, opportunity cost must be ___________ ________ (added to, subtracted from) total cost. Assuming __________ (varying, equal) benefits, the lowest cost option is the optimal choice.

added to, equal

Suppose you have just landed a job near the center of a city and you now need to decide where to live. If you live close to the city​ center, your​ round-trip commute will be 15 minutes. If you live in the distant​ suburbs, your​ round-trip commute will be 60 minutes. There are lots of workers like you who work downtown. Since there are only a limited number of apartments near the city​ center, these apartments will be allocated based on ________ (only the costs, only the benefits, both the costs and benefits) that you face. This process is known as ____________________ ("more bang for your buck, "optimization, differentiation.)

both the costs and benefits, optimization

Determine if the following statements better describe optimization in levels or optimization in differences. John is attempting to decide on a movie. He determines that the new Batman movie provides him with​ $5 more of a net benefit than the new Spiderman movie. A. Neither typeNeither type of​ optimization, since he is considering the total benefits of alternatives. B. Optimization in differencesdifferences​, since he is not making marginal comparisons. C. Both typesBoth types of​ optimization, since he is not considering the net benefits of alternatives. D. Optimization in​ levels, since he is comparing the net benefits between alternatives. E. Optimization in​ differences, since he is calculating the change in net benefits between alternatives.

optimization in​ differences, since he is calculating the change in net benefits between alternatives

Determine if the following statements better describe optimization in levels or optimization in differences. Nikki decided to take the first available parking space as she entered the student lot. She felt that the first available space had a​ $5 premium compared with all other possible spaces since she did not want to risk being late for her exam. A. Optimization in​ differences, since she is calculating the change in net benefits between alternatives. B. Optimization in​ levels, since she is comparing the net benefits between alternatives. C. Optimization in​ levels, since she is making marginal comparisons. D. Both types of​ optimization, since she is not considering the total benefits of alternatives. E. Neither type of​ optimization, since she is considering the net benefits of alternatives.

optimization in​ differences, since she is calculating the change in net benefits between alternatives

Determine if the following statements better describe optimization in levels or optimization in differences. Marcia finds that the net benefit of flying from Chicago to Honolulu on a​ non-stop United Airlines flight is​ $400, and the net benefit for the same trip flying on a​ one-stop American Airlines flight is​ $200. A. Optimization in​ levels, since she is comparing the net benefits between alternatives. B. Both types of​ optimization, since she is considering the net benefits of alternatives. C. Optimization in​ differences, since she is calculating the change in net benefits between alternatives. D. Optimization in differences​, since she is making marginal comparisons. E. Neither type of​ optimization, since she is not considering the total benefits of alternatives.

optimization in​ levels, since she is comparing the net benefits between alternatives

Determine if the following statements better describe optimization in levels or optimization in differences. Reagan determined that the net benefit of taking the combination of two lecture courses and an online lecture course was​ $100. The same three courses online gave her a net benefit of​ $80, and all three in a​ lecture-based format gave her a net benefit of​ $90. A. Neither type of​ optimization, since she is not considering the net benefits of alternatives. B. Optimization in differences​, since she is making marginal comparisons. C. Optimization in​ differences, since she is comparing total benefits between alternatives. D. Both types of​ optimization, since she is considering the total benefits of alternatives. E. Optimization in​ levels, since she is comparing the net benefits between alternatives.

optimization in​ levels, since she is comparing the net benefits between alternatives

Optimization is the process that describes​ __________. A. the choices that businesses make. B. how to obtain relevant data. C. how to maximize wealth. D. the budgeting process for firms. E. the production of resources.

the choices that businesses make

You and your​ friend, Jim, have just moved out of your dorm and into a new apartment. Both of you decide that you need to get a couch. Jim thinks you should get a new one from a furniture store nearby. You feel​ that, given your​ budget, it is best to buy a used one. Your other options are to buy one online or get a couch​ custom-made at the same furniture store. How would you arrive at an optimal solution​ here? Assume that your opportunity cost of time is​ $5 per hour. You and Jim would need to consider​ ___________. A. only the price of each couch. B. only the marginal benefit of each couch. C. the indirect costs of traveling to the furniture store and the opportunity cost of your time required to shop. D. the direct costs of the price of each couch and the cost of having each couch moved to your apartment. E. the direct costs and the indirect opportunity cost of your time required to shop Now suppose that you have a summer job that pays you​ $15 per hour. How would your analysis​ change? With a​ $15-per-hour summer​ job, ___________ would increase. a. the price of the couch b. the fuel cost of traveling c. the opportunity cost of your time d. the cost of having the couch moved

the direct costs and the indirect opportunity cost of your time required to shop, the opportunity cost of your time

Advances in wireless communication technology reduce the​ non-financial costs of long​ commutes: People who ride trains can get work​ done, and people who drive cars have more entertainment options. Given this​ information, which of the following will be an effect on the geographic area of​ cities? A. The total cost of commuting from any given distance to work will increase because the indirect cost of the commute will rise. B. The total cost of commuting from any given distance to work will reduce because the direct cost of the train ticket will fall. C. The total cost of commuting from any given distance to work will reduce because the indirect cost of the commute will fall. D. The total cost of commuting from any given distance to work will increase because the direct cost of the train ticket will rise. How will this result impact people as they decide how close to live to the city where they​ work? They will be: a. more willing to locate farther from the city b. more likely to locate closer to the city c. unaffected by this when making location decisions

the total cost of commuting from any given distance to work will reduce because the indirect cost of the commute will fall, more willing to locate farther from the city

Optimization in levels examines​ ___________, while optimization in differences analyzes​ ____________. A. total benefits of​ alternatives; net benefits of alternatives. B. total net benefits of​ alternatives; the change in net benefits. C. total net benefits of feasible​ alternatives; total net benefits of infeasible alternatives. D. total benefits of​ alternatives; total costs of alternatives. E. marginal benefits of​ alternatives; the change in marginal benefits.

total net benefits of​ alternatives; the change in net benefits