Homework 1 - The Colorado College Department of Economics...

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1 The Colorado College Department of Economics and Business Block 5 Econ 151 Homework #1 (1) (a) Briefly define the following terms used in class: (i) efficiency (ii) equity (iii) productivity. (5 points) (b) Opportunity cost is the cost of what you give up to get an item. What would likely be given up to obtain each of the items listed below? (i) Susan can work full time or go to college. She chooses work. (ii) Farmer Jones has 100 acres of land. He can plant corn, which yields 100 bushels per acre, or he can plant beans, which yield 40 bushels per acre. He chooses to plant corn. (2x2.5 = 5 points) (2) (a) Your car needs to be repaired. You have already paid $500 to have the transmission fixed, but it still doesn’t work properly. You can sell your car “as is” for $2000. If your car were fixed, you could sell it for $2500. Your car can be fixed with a guarantee for another $300. Should you repair your car? Why? (6 points) (b) Identify the parts of the circular-flow diagram immediately involved in the following
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This homework help was uploaded on 04/19/2008 for the course EC 151 taught by Professor Ghosh during the Spring '08 term at Colorado College.

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Homework 1 - The Colorado College Department of Economics...

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