Econ-Homework-Problem-Set-One-due-March-16

Econ-Homework-Problem-Set-One-due-March-16 - Homework...

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Homework Problem Set #1 Part 1: Problems Solution (Weight 75%. Weight of each problem 3%) 1. Antonio quit his job as a bartender where he made $38,000 per year to start his own tattoo parlor. His business expenses are $8,000 per year on rent, $9,000 per year on supplies, and $6,000 per year on part time help. As for his personal expenses, his apartment costs him $9,600 per year and his personal bills are an extra $3,400 per year. Calculate Antonio's opportunity cost of running the business? All the work has to be shown 2. Suppose that you own a house. What is the opportunity cost of living in the house? Please explain your answer. A) There is no opportunity cost because you own the house. B) There is no opportunity cost unless you could set up a business in the house. C) The opportunity cost is the rent you could have received from a tenant if you didn't live there. D) The opportunity cost is the cost of your monthly mortgage payment plus bills. Use the following graph to answer the questions #3, 4, and 5 Figure 2.1 3. Refer to Figure 2.1. If you are producing 400 tons of agricultural products per year, what is the maximum amount of manufactured products you can produce per year? 4) Refer to Figure 2.1. If you choose to produce only manufactured products, what is the
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maximum quantity you can produce per year? 5) Refer to Figure 2.1. What is the opportunity cost of increasing production of manufactured products from 300 tons to 500 tons per year? Please explain your answer. Use the following table to answer the questions #6-12 Bracelets /hour Pendants /hour Celia 10 2 Sondra 4 1 Table 3.1 6) All the work has to be shown. Consider two individuals, Celia and Sondra, who produce bracelets and pendants. Table 3.1 shows how much of each good Celia and Sondra can produce in one hour. Sondra's opportunity cost of one pendant is A) 2 bracelets. B) 4 bracelets. C) 5 bracelets. D) 10 bracelets. 7) All the work has to be shown. Consider two individuals, Celia and Sondra, who produce bracelets and pendants. Table 3.1 shows how much of each good Celia and Sondra can produce in one hour. Sondra's opportunity cost of one bracelet is A) 1/5 of a pendant. B) 1/4 of a pendant.
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Econ-Homework-Problem-Set-One-due-March-16 - Homework...

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