HW 1 (Ch. 1 & 2).docx - Ch 1Ten Principles of Economics 1...

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Chapter 3 / Exercise 3a
Exploring Macroeconomics
Sexton
Expert Verified
Ch. 1—Ten Principles of Economics 1) Economics is the study of: how society manages it’s scarce resources.
Scenario 1-1 You have the afternoon free. You have a choice between going to the movies with a friend or studying economics for three hours. If you go to the movies, you will spend \$8.00 on a ticket and \$4.50 on popcorn. If you choose to study economics for three hours, you will raise your exam grade by 10 points. 3) Refer to Scenario 1-1. a) What is your opportunity cost of going to the movies?
b) What is your opportunity cost of studying economics?
4) Debbie quits her job, which pays \$30,000 a year, to finish her college degree. Her annual college expenses are \$10,000 for tuition, \$2,000 for books, and \$700 for food. What is her opportunity cost of attending college for the year?
5) Zack quits his job at a consulting firm, which pays \$40,000 a year, to enroll in a two-year graduate program. His annual school expenses are \$30,000 for tuition, \$2,000 for books, and \$600 for food. What is his opportunity cost of attending the two-year graduate program?
6) Give an example of a trade-off faced by society.
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Chapter 3 / Exercise 3a
Exploring Macroeconomics
Sexton
Expert Verified
Scenario 1-3 It costs a company \$35,000 to produce 700 graphing calculators. The company’s cost will be \$35,070 if it produces an additional graphing calculator. The company is currently producing 700 graphing calculators. 7) Refer to Scenario 1-3. a) What is the company’s average cost?