Econ 302 Homework 1 - Chapter 1 Questions for Review 2. The...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 1 Questions for Review 2. The roommate should not take this his tuition payment into account if it is non refundable because it is a sunk cost. 3. Three activities that are accompanied by external costs are burning garbage, dumping waste into the ocean, and playing loud music late at night. Burning garbage clears it for the person who is responsible for it, but pollutes the air. Dumping waste rids the person of it, but pollutes the ocean. Playing loud music would be enjoyable to the person listening to it, but annoying to the person’s neighbors. Chapter 1 Problems 2. Tom would have to pay Dick the opportunity cost that he would lose giving his money away. He would give him 200 dollars in interest because he could have doubled his money growing mushrooms instead. 4. The cost of taking the bus in $260. The cost of driving is $120+20+110=$240. The rest of the costs associated with the car are sunk costs. So, you should drive. 5.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/12/2008 for the course ECON 302 taught by Professor Toossi during the Spring '08 term at University of Illinois at Urbana–Champaign.

Page1 / 2

Econ 302 Homework 1 - Chapter 1 Questions for Review 2. The...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online