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WendyEller-Assignment-Unit 1

# WendyEller-Assignment-Unit 1 - Wendy Eller BU 204-02AU...

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BU 204-02AU October 19, 2009 Assignment-Unit 1 Problem 2 Describe some of the opportunity costs when you decide to do the following: A. Attend college instead of taking a job. Opportunity costs of attending college instead of taking a job include: tuition costs, housing costs, income lost from not taking the job, and costs of books. B. Watch a movie instead of studying for an exam. Opportunity costs of watching a movie instead of studying for an exam include: Time lost studying for the exam, and receiving an unsatisfactory grade for not studying. C. Ride the bus instead of driving your car. Opportunity costs of taking a bus instead of driving your car include: giving up quicker commute times, being able to take alternate routes and the comfort of being in our own car. Problem 5 In the following examples, state how you would use the principle of marginal analysis to make a decision. A. Deciding how many days to wait before doing your laundry. In order to use marginal analysis to make my decision, I will analyze and base my decision on incremental gains and losses that result from that decision. In other words, I would start by deciding what my gains or losses would be if I did do or wait to do the laundry. For example, if I was going to lose valuable time that I really needed to be using to study for an exam and I still had clean clothes, I could put the laundry off for a few days. In this case, the benefits of doing the laundry does not out weigh the benefits of studying for the exam. On the other hand, I’d also consider how badly I needed clean clothes. If I was lacking clean clothes, and could spare the time to do the laundry, it would be more beneficial to do the laundry. The benefits here would out weigh the study time if I could spare that time. Either way, I must balance the benefits against the costs. B. Deciding how much library research to do before writing your term paper.

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WendyEller-Assignment-Unit 1 - Wendy Eller BU 204-02AU...

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