CHAPTER 1 - CHAPTER 1 1. ANSWERS WILL VARY, BUT SHOULD...

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CHAPTER 1 1. ANSWERS WILL VARY, BUT SHOULD INCLUDE THE NOTION THAT EACH ACTIVITY PROVIDES BENEFITS IN THE FORM OF SATISFACTION OR ADDITIONAL INCOME, BUT ALSO TAKES TIME AWAY FROM THE PURSUIT OF OTHER ACTIVITIES (OPPORTUNITY COST). TIME SPENT ON EACH ACTIVITY IS LIMITED BECAUSE THE ADDITIONAL BENEFIT OF DEVOTING AN EXTRA UNIT OF TIME TO ANY ONE ACTIVITY FALLS AS MORE TIME IS DEVOTED TO THE ACTIVITY. HENCE, AS MORE AND MORE TIME IS SPENT ON ONE ACTIVITY, IT WILL BECOME INCREASINGLY ATTRACTIVE TO DEVOTE THE NEXT UNIT OF TIME TO SOME OTHER ACTIVITY. 2. Answers will vary. 3. (A) NORMATIVE (B) POSITIVE (C) NORMATIVE 4. AVERAGE COST IS $1.17 ($19.9517 HOURS). MARGINAL COST IS $0. 5. (A) THE STATE SHOULD ALLOW THE MARKET TO PROVIDE WHAT PEOPLE WANT. SINCE GAMBLING IS NOT MANDATORY, ONLY THOSE WHO WANT TO GAMBLE WILL DO SO. TAX REVENUES THAT ARISE FROM CASINO GAMBLING ARE PAID VOLUNTARILY. (B) SOME ARGUE THAT CASINO GAMBLING IS ASSOCIATED WITH CRIMINAL ACTIVITY THAT HAS A COST TO THE COMMUNITY AT LARGE. IN ADDITION,
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This note was uploaded on 04/01/2010 for the course ECONOMICS 1005 taught by Professor Chapman during the Spring '08 term at University of the West.

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CHAPTER 1 - CHAPTER 1 1. ANSWERS WILL VARY, BUT SHOULD...

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