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Ch. 1 Review Questions 1-5 - 1 2 3 4 5 6 Mike Weisman ECO...

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Mike Weisman 9-3-07 ECO 211 Ch. 1 Review Questions 1-5 1. Give 3 examples of important trade-offs that you face in your life. a. Buying food at the supermarket-I decide what to buy and also what brands. I can buy name brands for more money or the unknown for much cheaper b. I decide when and for how long is sleep. I need to decide whether it is more important to me to sleep or to do other things like homework or other stuff like that. c. I need to decide how much time I spend partying. I can trade the time to party for the time to hang with my friends or I can spend it other ways. 2. What is the opportunity cost of a movie? a. The opportunity cost of the movie is not only the price you paid but also the time that you spent at the movies. 3. Water is necessary for life. Is the marginal benefit of a glass of water large or small? a. The marginal benefit of a single glass of water is actually small. You do not gain much from one small glass. You need water over time to survive but one glass does not provide that much for a person.
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