assignment 1 - University of Victoria Econ 203 Assignment#1...

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University of Victoria September 17, 2010 Econ 203 Assignment #1 Due: Monday October 4 th @ 12 noon . NOTE : Please submit your assignments in the boxes marked “ECON 203” near economics department office. The boxes will have the TA name and the lab section marked on the boxes, so drop your assignments in the respective boxes. Failure to do so may result in your assignment being lost and you will not be awarded any points for that assignment. Make sure to put your lab section and your TA’s name on your assignments. Total marks: 35 Questions from chapter 1 Question #1: Why should sunk costs be irrelevant for current decisions? (2 marks) Question #2: Jamal has a very flexible summer job. He works everyday but is allowed to take a day off anytime he wants. His friend Don suggests they take off work on Tuesday and go to the amusement park. The admission charge for the amusement park is $15 per person, and it will cost them $5 each for gasoline and parking. Jamal loves amusement parks and a day at the park is worth $45 to him. However, Jamal also enjoys his job so much that he would actually be willing to pay $10 per day to do it. (3 marks) a) If Jamal earns $10 if he works, should he go to the amusement park? b)
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assignment 1 - University of Victoria Econ 203 Assignment#1...

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