Answers to chapter 2

Answers to chapter 2 - Solutions to End-of-Chapter...

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Solutions to End-of-Chapter Exercises Chapter 2 SECTION 2.1: THE PRINCIPLE OF OPPORTUNITY COST 1.1 10, 180 1.2 arrow up 1.3 arrow up 1.4 $15,500 1.5 safe drinking water for 5 million people 1.6 $88,000 per year 1.7 Scientists and engineers will be used to execute the mission, so part of the opportunity cost might be measured in science and engineering education (or any other non-mission-related scientific productivity) foregone. 1.8 The cost of holding wealth in non-interest-bearing form is higher where the interest rate is higher. 1.9 a. The loan cost me the interest I could have earned by investing the $100. b. The opportunity cost is the current market price, not the historical price. c. The cost of the stadium is $50 million plus the foregone earnings from renting the land or the interest that could be earned on the proceeds from sale of the land (whichever is higher). 1.10 a. b.
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16 Chapter 2 c. 6, 24
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The Key Principles of Economics 17 SECTION 2.2: THE MARGINAL PRINCIPLE 2.1 Yes, the marginal benefit ($150) exceeds the marginal cost ($100). 2.2
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Answers to chapter 2 - Solutions to End-of-Chapter...

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