Hello I need help for this homework? CHAPTER ONE PROBLEM SET Give the best answe

Question

Hello I need help for this homework?

CHAPTER ONE PROBLEM SET Give the best answer to each of the following questions. 1. Briefly point out the faulty reasoning in each of the following situations You win a free, nontransferable ticket to and it will therefore cost you nothing to go, you decide to go to the concert. a. a Sheryl Crow concert. Since the ticket is free b.. You paid nonrefundable tuition of $3,000 to take a 15-week course. Therefore, the opportunity cost of attending class each week is $3,000 divided by 15, or $200. You like to avoid costs; every decision involves opportunity cost. So you don't make decisions c. You have purchased 5 premium apples for $1.99 a pound, but when you get home, you discover they are mushy. Since you paid top dollar for these apples, you decide you have to eat them. d. Classify the following Wall Street Journal articles as involving macroeconomic on microeconomic issues based on their titles: 2. a. "Bernanke Sees Long Slog to Trim U.S. Trade Deficit" b. "How Drugs for Rare Diseases Became Lifeline for Companies" c. "Monetary Tightening Damps Brazil Investment" d. "Debut of Chicken Little Gives Disney Something to Crow Over" Chapter 1, Colander's Microeconomics

Explanation / Answer

1.
A.
There is a faulty reasoning, as opportunity cost is involved in going to the concert. If I go to the concert, then it I forego the other work and benefits from that work. It means that opportunity cost is involved when I go to the concert. Hence, I should consider the opportunity cost before going to the concert even if the tickets are given as free.
B.
The calculation of dividing $3000/15, gives the explicit cost or accounting cost of going to the tuition. But, it is not the opportunity cost. Here, opportunity cost is the foregoing of the other activities and its benefits, when I go to the tuition. For example, if I forego of a working opportunity of $500 per week. Then, the opportunity cost of going to tuition is $500 per week.
C.
Decisions involve opportunity cost, but it helps us to make a right decision. We have to make a decision that has a lower opportunity cost. Not making a decision, will create huge loss. So, a decision should be done on the basis of opportunity cost analysis as well as marginal analysis if needed.
D.
Mushy apples (pulpy or not so good in quality) should not be consumed, because it will attract huge cost of visiting the doctor if the person gets unwell. Since, the cost of visiting the doctor is higher than the money $1.99 per pound, paid for the apples. So, apple should not be consumed.

2.

A
It is related to macroeconomic issues as trade deficit is the area of macroeconomic concerns.
B.
It is microeconomic issue as it is related to the firm level.
C.
It is related to macroeconomic issue as monetary policy is the part of macroeconomics.
D.
It is microeconomic issue as it is related to the firm level competition in the market.

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