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Economics
Economics Today
Chapter 2
Q. a - For Critical Thinking

Chapter 2: Q. a - For Critical Thinking (page 31)

Why might a person pay a firm at a mall to prepare her tax forms while she shops instead of allocating the same amount of time to finding a qualifying Free-File tax-preparation service?

Short Answer

Expert verified

The opportunity cost of preparing her tax forms while they shop is lesser as compared to finding a qualifying Free-File tax-preparation service.

Step by step solution

01

Step 1. Opportunity Cost

Opportunity cost is the next-best alternative that must be sacrificed to satisfy the wants.

02

Step 2. Reason.

The opportunity cost of preparing her tax forms while they shop is lesser as compared to finding a qualifying Free-File tax-preparation service. The person buyingand her tax being filed could result in time-saving for her.

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Most popular questions from this chapter

Explain why the economy faces a trade-off between consumption goods and capital goods.

Based on the information in Problems 2-15, should you and your roommate specialize in a particular task? Why? And if so, who should specialize in which task? Show how much labor time you save if you choose to “trade” an appropriate task with your roommate as opposed to doing it yourself.

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?

The following table illustrates the points a student can earn on examinations in economics and biology if the student uses all available hours for study. Plot this student’s production possibilities curve. Does the PPC illustrate the law of increasing additional costs?

Economics	Biology
100	40
90	60
80	75
70	85
60	93
50	98
40	100

Suppose that in Fig 2-24, the nation with other wise the same background conditions as in Problem 2-23 currently has sufficient resources to produce combinations located along only the innermost production possibilities curve. If the nation produces no additional smartphones this year, will the intermediate-shifted PPC resulting from minimal economic growth or the farthest shifted PPC caused by more significant economic growth be more likely to apply next year?

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