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Chapter 2: Q. 2.19 (page 47)

Suppose that in Fig 2-1, a student currently is allocating her study time in such a way that she is earning a C in mathematics and a C in economics. What is the opportunity cost, measured in terms of the resulting grade change, if this student wishes to reallocate her study time in order to raise her mathematics grade by one letter, from a C to a B?

Short Answer

Expert verified

Opportunity cost is a change of grade in economics from C to D.

Step by step solution

01

Step1. Given information

Student is allocating her study time in a way that she is able to score a C in mathematics and a C in Economics too.

02

Step2. Explanation

If the person wishes to relocate the time for improving grades in mathematics from C to B, as per the production possibility curve or the PPC given to us, she will have to identify the opportunity cost for the same and will have to let go of the C grade in economics and hence earn D.

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Most popular questions from this chapter

Consider a change in the table in Problems 2-6. The student’s set of opportunities is now as follows: Does the PPC illustrate the law of increasing additional cost? What is the opportunity cost to this student for the additional amount of study time on economics required to move her grade from 60 to 70? From 90 to 100?

EconomicsBiology
10040
9050
8060
7070
6080
5090
40100

Explain why the scarcity problem causes people to consider opportunity costs and trade-offs among choices.

After the concert discussed in Problems, 2-3 is over and you and your friend are traveling home, you discuss how each of you might otherwise have used the four hours devoted to attending the concert. The four hours could have been used to study, watch a sporting event on TV, or get some extra sleep. Your friend decides that if she had not spent four hours attending the concert, she would have chosen to study, and you reply that you otherwise would have watched the televised sporting event. Identify the relevant opportunity costs for you and your friend for allocating your four hours to attending the concert. Explain briefly.

Country A and country B produce the same consumption goods and capital goods and currently have identical production possibilities curves. They also have the same resources at present, and they have access to the same technology.

a. At present, does either country have a comparative advantage in producing capital goods? Consumption goods?

b. Currently, country A has chosen to produce more consumption goods, compared with country B. Other things being equal, which country will experience the larger outward shift of its PPC during the next year?

If you receive a ticket to a concert at no charge, what, if anything, is your opportunity cost of attending the concert? How does your opportunity cost change if miserable weather on the night of the concert requires you to leave much earlier for the concert hall and greatly extends the time it takes to get home afterward?
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