Homework (2) - Chapter 1 1(Rational Self-Interest Discuss...

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Chapter 1 1- (Rational Self-Interest ) Discuss the impact of rational self-interest on each of the following decisions: a. Whether to attend college full time or enter the workforce full time (a) opportunity cost of joining workforce full time would be education and opportunity cost of going to college would be wages. b. Whether to buy a new textbook or a used one ANSWER: (b) opportunity cost of using the used book one is pleasure & confidence and that of new book is money saved. 2- ( Resources ) To which category of resources does each of the following belong? a. A taxicab ANSWER: Essential work equipment (also company vehicle, so may/may not have increased mobility leading to reduced transport costs and better access to better/cheaper services); also maintenance.
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ANSWER: As above, except it might be more peripheral as people won't decide whether to use the company based on what kind/condition it is in; also won't need maintenance. c. One hour of legal counsel ANSWER: Service that will insure against potential losses (if the counsel prevents you doing something illegal) /provide an income stream (if s/he tells you about a tax loophole) / damage control (if someone sues). d. A parking lot ANSWER: Rental property that will generate income with management. 3- ( Micro versus Macro ) Determine whether each of the following is primarily a microeconomic or a macroeconomic issue: a. What price to charge for an automobile ANSWER: is a Microeconomic issue. b. Measuring the impact of tax policies on total consumer spending in the economy
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Homework (2) - Chapter 1 1(Rational Self-Interest Discuss...

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