Homework 1 Answers

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

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1 The Colorado College Department of Economics and Business Block 5 Econ 151 Homework #1 answers (1) (a) (i) Efficiency: means that society is getting the most it can from its scarce resources. (ii) Equity: means that the benefits of those resources are distributed fairly among society’s resources. (iii) Productivity : it refers to the quantity of goods and services produced from each hour of a worker’s time. (b) (1) By choosing to work, Susan gives up a college degree and the increase in income through life that it would have brought her (but doesn’t have to pay tuition). (2) By choosing to plant corn, Farmer Jones cannot plant beans. Since 1 acre of land yields 40 bushels of bean, he misses out 100x40 = 4000 bushels of beans. (2) (a) Yes, you would repair the car. The marginal benefit of fixing the car is $2500 - $2000 = $500. The marginal cost of repairing is $300. Since the marginal benefit exceeds the marginal cost you would repair the car. The initial $500 spent is a cost that has
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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 Answers - The Colorado College Department of...

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