1. Understanding opportunity cost You work as an assistant coach on the universi
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Question
1. Understanding opportunity cost
You work as an assistant coach on the university basketball team and earn $15 per hour. One day, you decide to skip the hour-long practice and, instead, go to the local carnival, which has an admission fee of $9.
The total cost (valued in dollars) of skipping practice and going to the carnival (including the opportunity cost of time) is .
A.$6 B.$9 C.$15 D.$24
2. Determining opportunity cost
Juanita is deciding whether to buy a skirt that she wants, as well as where to buy it. Three stores carry the same skirt, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $114 for the skirt:
Store
Travel Time Each Way
Price of a Skirt
(Minutes)
(Dollars per skirt)
Juanita makes $30 an hour at work. She has to take time off work to purchase her skirt, so each hour away from work costs her $30 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling.
Complete the following table by computing the opportunity cost of Juanita's time and the total cost of shopping at each location.
Store
Opportunity Cost of Time
Price of a Skirt
Total Cost
(Dollars)
(Dollars per skirt)
(Dollars)
Assume that Juanita takes opportunity costs and the price of the skirt into consideration when she shops. Juanita will minimize the cost of the skirt if she buys it from the .
A.store across town B.store in the neighbring city C.local department store
3. A decision at the margin
Yakov is a hard-working college senior. One Thursday, he decides to work nonstop until he has answered 100 practice problems for his math course. He starts work at 8:00 AM and uses a table to keep track of his progress throughout the day. He notices that as he gets tired, it takes him longer to solve each problem.
Time
Total Problems Answered
1.Use the table to answer the following questions.
A.The marginal, or additional, gain from Yakovs first hour of work, from 8:00 AM to 9:00 AM, is ? problems.
B.The marginal gain from Yakovs third hour of work, from 10:00 AM to 11:00 AM, is ? problems.
Later, the teaching assistant in Yakovs math course gives him some advice. Based on past experience, the teaching assistant says, working on 25 problems raises a students exam score by about the same amount as reading the textbook for 1 hour. For simplicity, assume students always cover the same number of pages during each hour they spend reading.
2.Given this information, in order to use his 4 hours of study time to get the best exam score possible, how many hours should he have spent working on problems, and how many should he have spent reading?
A.0 hours working on problems, 4 hours reading
B.1 hour working on problems, 3 hours reading
C.2 hours working on problems, 2 hours reading
D.4 hours working on problems, 0 hours reading
2. Determining opportunity cost
Juanita is deciding whether to buy a skirt that she wants, as well as where to buy it. Three stores carry the same skirt, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $114 for the skirt:
Store
Travel Time Each Way
Price of a Skirt
(Minutes)
(Dollars per skirt)
Local Department Store 15 114 Across Town 30 86 Neighboring City 60 60Juanita makes $30 an hour at work. She has to take time off work to purchase her skirt, so each hour away from work costs her $30 in lost income. Assume that returning to work takes Juanita the same amount of time as getting to a store and that it takes her 30 minutes to shop. As you answer the following questions, ignore the cost of gasoline and depreciation of her car when traveling.
Complete the following table by computing the opportunity cost of Juanita's time and the total cost of shopping at each location.
Store
Opportunity Cost of Time
Price of a Skirt
Total Cost
(Dollars)
(Dollars per skirt)
(Dollars)
Local Department Store ? 114 ? Across Town ? 86 ? Neighboring City ? 60 ?Assume that Juanita takes opportunity costs and the price of the skirt into consideration when she shops. Juanita will minimize the cost of the skirt if she buys it from the .
A.store across town B.store in the neighbring city C.local department store
3. A decision at the margin
Yakov is a hard-working college senior. One Thursday, he decides to work nonstop until he has answered 100 practice problems for his math course. He starts work at 8:00 AM and uses a table to keep track of his progress throughout the day. He notices that as he gets tired, it takes him longer to solve each problem.
Time
Total Problems Answered
8:00 AM 0 9:00 AM 40 10:00 AM 70 11:00 AM 90 Noon 1001.Use the table to answer the following questions.
A.The marginal, or additional, gain from Yakovs first hour of work, from 8:00 AM to 9:00 AM, is ? problems.
B.The marginal gain from Yakovs third hour of work, from 10:00 AM to 11:00 AM, is ? problems.
Later, the teaching assistant in Yakovs math course gives him some advice. Based on past experience, the teaching assistant says, working on 25 problems raises a students exam score by about the same amount as reading the textbook for 1 hour. For simplicity, assume students always cover the same number of pages during each hour they spend reading.
2.Given this information, in order to use his 4 hours of study time to get the best exam score possible, how many hours should he have spent working on problems, and how many should he have spent reading?
A.0 hours working on problems, 4 hours reading
B.1 hour working on problems, 3 hours reading
C.2 hours working on problems, 2 hours reading
D.4 hours working on problems, 0 hours reading
Explanation / Answer
1.the total cost=15$+9$=24$ because he losses a hour in work i,e..15$ and additionally spending 9$ in carnival.so,option D
2.local department store:the opportunity cost of time=15min+15min+30min=1 hr :- 30$
the total cost = 30$+114$
= 144$
across town::the opportunity cost of time=30min+30min+30min=1.5hrs :- 1.5*30 = 45$
the total cost = 45$+86$
= 131$
neighbouring city::the opportunity cost of time=60min+60min+30min=2.5hrs :- 2.5*30 = 75$
the total cost = 75$+60$
= 135$
hence option B
3.1) A.40 problems
B. it been decreased to 20 problems
2) option:C
because A.o hrs working+4 hrs reading = 25*4 =100 problems solved
B. 1 hrs working+3 hrs reading = 40+25*3=115 problems solved
C. 2 hrs working+2 hrs reading =70 +25*2=120 problems solved
D. 3 hrs working+41hrs reading =90 +25*1 = 115 problems solved
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