Short Assignment 1 Answer Key

Short Assignment 1 Answer Key - ECON 256: Intermediate...

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ECON 256: Intermediate Microeconomics Short Assignment: 1 Fall 2010 1 Answer Key Due Date: Tuesday, September 07, 2010 1. (Textbook Problem Question 1) Chris has a flexible summer job. He works every day but is allowed to take a day off anytime he wants. Of course, if he takes a day off, he doesn’t get paid. His friend Don suggests they take off work on Tuesday and go to the local Six Flags amusement park. The admission charge for the amusement park is $15 per person, and it will cost them $4 each for gasoline and parking. Chris loves amusement parks and a day at the park is worth $45. However, Chris also enjoys his job so much that he would actually be willing to pay $10 per day to do it. (That is, a day’s work is worth $10 of satisfaction to him.) (a) If Chris earns $10 if he works, should he go to the amusement park? Explain. Benefit = $45 Cost (including opportunity cost) = $19 (admission, gas, parking) + $10 (job enjoyment) + $10 (lost wages) = $39 Benefit > Cost: Go to the amusement park! (b) If Chris earns $15 if he works, should he go to the amusement park? Explain.
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Short Assignment 1 Answer Key - ECON 256: Intermediate...

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