EC 202 Fall 2018 Instructions: Problem Set 1 is due Friday, Sept. 14 at 12 noon.
ID: 1133139 • Letter: E
Question
EC 202 Fall 2018 Instructions: Problem Set 1 is due Friday, Sept. 14 at 12 noon. You may turn it in during class or to my office (Old Botany 1A). No late submissions will be accepted. Answer all questions on these pages. You must show all work legibly to receive credit. Make sure all pages are stapled together and your name is on each page. Name Problem Set 1 1. Label which statement below is a Normative statement (N) and which is a Positive statement (P): Colorado should allow the sale of marijuana with a 15% sales tax. (P, N) If Colorado regulates and taxes the sale of marijuana at 1596, then it will increase the taxes by more than the cost of regulation. (P, N) 2. What is an opportunity cost of going to graduate school after college? 3. On January 1,2018 your account balance is $2,000. If on December 31, 2018 your account balance is $2,150. What is the percentage change in the account balance? 4. Using the Circular Flow diagram from Class 2. Show the following transactions (both for funds and for inputs/outputs) on the diagram. a. Jack purchases a shirt for $40 made at the shirt factory. b. Sarah works at the car factory for 8 hours and is paid S120. c, Marco owns 1% of the local Fish Company and receives$2,000 as his share of profits. Market For G&S Firms Households Market for Factors of ProductionExplanation / Answer
ANSWER-2)
Opportunity cost is the loss of potential benefits from choosing one option from a number of alternate options. For every choice a person makes, there is potential gain which he lost out on by choosing that option. As we all know attending graduate school after college isn’t cheap. There is a cost of books, annual tuition, room and board, transportation, food, clothing, and any number of other things associated with attending college. However the actual cost of attendance is much higher than this in not the monetary and non-monetary terms. The salary would have been the opportunity cost a person rejected the offer during the student tenure. Maybe a person has some money saved up, so if he decides to spend it on graduate school, then an opportunity cost could have been the fact that a person could have used the money to buy a car. The non-monetary gains such as socializing with other people instead of spending time in graduate school, travel around the world, learning thinks related to interest like painting, music etc
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