# HW#1_SP16_Answers(1) - ECON 1014 HOMEWORK#1 Chapter 1 1...

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Chapter 1 / Exercise 40
Mathematical Applications for the Management, Life, and Social Sciences
Harshbarger
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ECON 1014 HOMEWORK #1 Chapter 1 1. Lucas is an unemployed mechanic. He collects \$250 per week in unemployment insurance, but he must actively “search” for work in order to receive the unemployment insurance. Lucas spends 4 hours per day, 5 days per week, looking for a job. One day, his Aunt Anita, who owns a retail store, offers Lucas a job as window cleaner. She offers to pay Lucas \$250 per week after taxes for 40 hours of work. What is Lucas’ opportunity cost to take the window cleaning position? Choose the best answer. (1 pt.; CIRCLE ONE) A. 40 hours per week of lost free time B. There is no opportunity cost to this decision because Lucas receives the same amount of money each week in both scenarios. C. 20 hours per week of lost free time D. \$250 in foregone earnings each week E. Impossible to determine from given information.
Chapter 21 2. Identify whether the following statements are positive or normative. For “positive” put P in the blank. For “normative” put N in the blank. ( ½ pt. each; 2 pts. total) i. __ N __ Public university student tuition should be funded using a new, higher income tax. ii. __ N __ The present level of income tax is unfair. iii. __ P __ High mortgage interest rates encourage saving.
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Chapter 1 / Exercise 40
Mathematical Applications for the Management, Life, and Social Sciences
Harshbarger
Expert Verified