Chapter 1 - odd numbers_Part1.pdf

Familys opportunity cost in terms of what they m ust

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family’s opportunity cost in terms of what they m ust give up. b For a politician deciding whether to increase spending on national parks, the trade-off is between parks and other spending items or tax cuts. If more money is spent on national parks, that may mean less spending on national defence or on the police force. Or, instead of spending more money on national parks, taxes could be reduced. c When a company director decides whether to open a new factory, the decision is based on whether the new factory will increase the firm’s profits compared to oth er alternatives. For example, the company could upgrade existing equipment or expand existing factories. The bottom line is ‘Which method of expanding production will increase profit s the most?’ d In deciding how much to prepare for a lecture, a professor faces a trade-off between the value of improving the quality of the lecture compared to other things they could do with her time, such as working on additional research.
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  • Economics, $2 million, $5 million, $6 million, $5 million, Microeconomics 5th Edition Ans

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