lol it did not even take me 5 minutes at all! The table shows a farm's production possibilities. The ticket normally sells for $90, but you cannot sell yours. Explain the concept of opportunity cost using an example. Opportunity cost is equal to implicit costs plus explicit costs. Explain. An opportunity cost is the most desirable option of all those available, but there may be more than one trade-off. The price of the admission pass, b. They spend their time either fishing or collecting coconuts. Suppose that the city of Phoenix has started a new sustainability program, and that they are trying to decide how to spend their budget in the first year. Suppose the government auctions off permits to car and truck owners, with each permit allowing the user to emit five tons of carbon dioxide each year from her or his vehicle. Should use appropriate models/graphs: Opportunity cost. The televisions can be sold in their present condition for $32,000, or repaired at a cost of $43,000 and sold for... Is it true or false? If Jason goes skiing, he would wear the ski jacket he purchased last year... What is the opportunity cost going from point A to point B? c. the difference between interest rates on monetary assets and on non-monetary assets. Economists and accountants treat production costs differently. If you have a competitive equilibrium, will a firm have zero economic and accounting profit? Consider Noah's decision to go to college. In Snap each worker in a one-hour period can produce either 13.72 pounds of bananas or 7.48 pounds of sugar. She is considering quitting her job and going to university full time for four years. Assuming you are the chief executive officer (CEO) of Walmart, describe a situation in which you would use marginal analysis to make a business decision. The production possibilities for country Y are either 2,000 bushels of soybeans or 4,000... John is an athlete. True b. Suppose you run a lawn-cutting business and use solar-powered equipment that you could sell tomorrow for $5,000. According to the table, what is the opportunity cost of producing one pair of red pants on Nantucket? 0 washers, b. True b. Use the table to fill in the columns below and calculate Crusoe's opportunity cost of a pound of berries as he spends more time picking be... Russell spends an hour studying instead of playing tennis. The market is initially in equilibrium at a price of $15 and a quantity of 80. The opportunity cost of attending class this evening is A. Barb uses 1.5 hours to produce 1 compute... Answer true or false The opportunity cost of producing in low-income, developing countries rises over the product cycle, according to theory. Here are three things you could do: a. b. two dozen eggs. State true or false and justify your answer: Opportunity costs are roughly the same for everyone who attends college. It takes Brazil 60 units of labor to produce one ton of sugar and 300 units of labor to pr... Christine worked as a consultant last year. If a hospital buys a medical testing machine for $285,000 and can resell it at $80,000 after 4 years usage, the opportunity cost of this machine at the end of the 4th year is: a. so many fake sites. When the opportunity cost of producing a good rises as you produce more of it, you experience a. normative economics. c. If you alre... Louis Vuitton decides to invest $80,000,000 into a shoe factory in Milan from its money market account. economic depreciation IV. What is often the largest opportunity cost? a. Is... What is an opportunity cost and how does it affect our daily lives? Services, Working Scholars® Bringing Tuition-Free College to the Community. Imran is a dairy farmer and currently has revenues of $40,314 per month. Comparative Advantage Wheat Cloth Great Britain 160 640 The United States 1,280 640 a. Chandler takes four hours to bake 1 loaf of br... Isaac has four potential jobs to consider, each with different salary offers. If a trucking company were operating at capacity, but had an opportunity to fill a one-time high volume special order, which of the following ramifications could occur? a. the economic perspective. Suppose that the benefit of owning the dog is worth $500 to have and that John bears a cost of $700 from the barking. a. It takes the US 50 units of labor to produce one ton of sugar and 200 units of labor to produce one crane. She is thinking of quitting this job to work full time in her own business. To get started finding Guided Section 2 Opportunity Cost Answer Key , you are right to find our website which has a comprehensive collection of manuals listed. $4... Had cable TV prices stayed low, would satellite TV service have spread as fast? Lutfi values attending Elite U at $60,000 per y... Sara can produce 1 gallon of wine in 20 minutes and a hamburger in 5 minutes. The highest-valued alternative that must be sacrificed as a result of choosing among alternatives is called the of the alternative chosen. What are your opportunity costs in taking an economics course? Suppose that Lo and Manuel can either run errands or wash dishes. For students who accept... What are the tools that can be used to value non-financial opportunity costs? In the country of Zana, a unit of labor can produce 4 units of good X or 2 units of good Y; in the country of Bren, a unit of labor can produce 2 units of good X or 1 unit of good Y. 24 dozen roses c. 50 dozen roses d. 150 dozen roses. Opportunity costs include A. both implicit costs and explicit costs. Explain. What kinds of costs are involved in... You are considering adding a new software title to those published by your highly successful software company. a. tuition at a state university. Suppose a student has 3 hours of time to spend at her apartment before afternoon classes. chapter 2 section 2: economics. The diagram above shows the production possibilities curves for Abhi and Jillian who both produce pedometers and stopwatches using the same amount of resources. Parking will be $20 and to attend the concert, Karl will have to miss 5 hours of work at $6 per hour. a. Alexandra__5. Which of the following is an opportunity cost of going to college full time? Opportunity cost only measures direct monetary costs. I. The example of the mandate that washing machines use less energy, and the unintended consequence of that mandate, best demonstrates what important economic concept: a. B) whose family is extremely wealthy. He has $120 to spend and wants to buy either a heart rate monitor or new running shoes. An opportunity cost is: a. the cost incurred to gain the opportunity to make a sale. The table shows an economy that produces education services and consumption goods. The Canadian government is considering whether to spend $200 million on new hospitals or $200 million on new fighter jets. Opportunity cost is evident in the production possibilities frontier (PPF) graph a. as you move from one point on the frontier to another point on the frontier. ... -Decrease the opportunity cost of doing something ---> Do more of it. The tables show their production possibilities. Opportunity cost refers to: A. the prices paid to an opportunity shop B. wants that are given up in order to get something else C. unwanted resources D. cost use to produce resources. Discuss how to make decisions, based on opportunity cost. If you add the new product, it will use capacity on your disk duplicating machines tha... What is opportunity cost, and how does it affect the decision-making process for business decisions? Suppose you own an acre of land. A. It only applies to market transaction, not non-market transactions. The unit cost to manufacture 1 unit of KJ37 is presented below. Both the heart rate monitor and running shoes cost $120, so he can only buy one. The lost profits from lost customers are an example of what type of cost? According to the table, the opportunity cost of 1 unit of cheese in Spain is ____ a. Online Library Section 2 Guided Review Answer visual … A severe thunderstorm on the night of the concert makes driving hazardous. C. difference between the benefits from a choice and the costs of that choice. According to Blanchard, Europeans are more likely to use increases in real wages resulting from technological progress to increase [{Blank}], and Americans are more likely to use these increases in... Ann and Tommy produce both term papers and study guides. Each week, Tony produces 6 snowboards and 12 skis and Patty produces 3 snowboards and 6 skis. Also explore over 4 similar quizzes in this category. B. the sum of its explicit costs and its implicit costs. Use the information above to compute the opportunity cost of producing 1 unit of wheat in each country. Main Idea: A trade-off is the act of giving up one thing for another. Read Section 2 3. This quiz and worksheet will test your knowledge of opportunity cost. In his book "Naked Economics," Charles Wheelan discusses the falling birth rate in industrialized countries like Japan and the United States. State true or false and justify your answer: Trade-offs are another way of talking about opportunity costs. B. the net benefit of the activity you would have chosen if you had not taken the course. B. accounting costs. How is it related to efficiency, waste, and standard of living? Suppose Peyton can do the job in 2 hours, or he can hire a gardener, Kris, to do it in 3 hours. A country has a comparative advantage in producing a good if its opportunity cost of producing that good is higher than elsewhere. This truck is fully depreciated and costs you on... Apple Computer Inc. decides to make iTunes freely available in unlimited quantities. Read a good novel (you value this at $13), or c. Go to work (you could earn $20). During the winter break, Sam decides to go for a skiing vacation in Aspen instead of taking piano lessons. If Purdy is currently producing 210 cars and 175 trucks,... State true or false and justify your answer: The payments to quasi-fixed inputs should be ignored in decision making since they are not opportunity costs. The greatest use of our limited resources occurs when _____. C. implicit costs but not explicit costs. a) A promising young mathematician who will command a high salary once she earns her college degree... Julia and Ralph need to decide which one of them will take time off from work to complete the rather urgent task of pruning their trees. The appropriate opportunity cost of capital is the return that investors give up on alternative investments that possess the [{Blank}] (same, different) level of risk. c. increasing as point B will be moved... Omega Industries uses ten units of Z each month in the production of scientific equipment. Investing 100,000 in additional raw materials, mostly palladium, should allow cryogenic concepts to increase production and earn an additional 112,000 next year. False. (c) usually less than the dollar value of the item. These questions are from Chapter 1 Section 2. opportunity cost? How many alternatives is the government faced with in this question? The above table shows alternative possible exam outcomes with three alternative uses of the student's time. Assume the standard model. If the international terms of trade settle at a level that is between each country's opportunity cost, a. only one country gains from trade. What is the opportunity cost of his decision? Suppose Andrea has a job that pays her $25,000 per year(after taxes). Suppose that a farmer has land that can produce 20 bushels of corn per acre or 10 bushels of wheat per acre. B) price... John owns a bookstore and works 40 hours per week managing the store. ii. According to economists, extreme couponing is not worth the effort if the (blank) exceeds the (blank) from the coupons, when time is taken into account. If she goes to college, she will spend $20,000 on tuition, $10,000 on room and board, and $2,000 on books. Consider Frank's decision to go to college. b. the cost of clothing and transportation. Give some examples. Using the same amount of resources, the United States and Canada can both produce lumberjack shirts and lumberjack boots as shown in the table below. According to Buffett, "Ben made his customary calculation of value to price... Are opportunity costs based on a person's tastes and preferences? What is the opportunity cost of an additional pound of lettuce? 1.25 pounds of kale b. How do opportunity costs fit into the concept of problem-solving, decision making, and judging? The wages he could have earned.... Mallory has a 10-month-old baby. What is your PER UNIT OPPORTUNITY COST for each hat in terms of shirts given up? Simon and Erica earned $50,000 per year each as lecturers. The opportunity cost to him of studying is a. the improvement in his grades from studying for the hour. You have three options for the last $5 in your pocket: a cappuccino you value at $6, a smoothie you value at $7, and a frog. This is shown in the diagram by a shift from D 1 to D 2. Harvey owns both a hardware business and the building that he uses to run the firm. Define opportunity cost. C. the average opportunity cost. d. another name for a... Factors such as BidBuy's feedback rating system that are valuable to the company's customers but which are not useful on other online auction sites are examples of A) first-mover advantages. She hired an administrative assistant for $15,000 per year and rented office space (utilities included) for $3,000 per month. She has 8 hours a day to produce toys. A. more schools B. more hospitals C. more food D. more military power. B. rental income forgone by not renting a piece of capital equipment to someone els... An implicit rental rate is A. an opportunity cost. a. This person's opportunity cost of one bushel of wheat is: a. Assume there are two nations each producing two goods, X and Y, and they only trade with each other. What is the opportunity cost in economics? The company's projected impact on the local economy is estimated to be $20 million. Comparative advantage, b. Assume that the rental cost of ski equipment is $120 and the lift ticket costs $66. When she had her baby, Mallory switched from a full-time position that paid $3,900 a month to a part-time position that pays $1,500 a month (in the same firm). She earns $8 an hour. 2 breads. If Fran can produce either 15 pizzas or 50 cheesecakes per da... Juan can either mow 2 lawns or clean 4 windows in 5 hours. Explain the term __opportunity cost__, and give some examples. B. neither explicit costs nor implicit costs. Her total revenue for the y... Mountain Mack and Big Lake Bob spend their time carving fishing lures and duck decoys. The production possibility frontiers for Jackson and Tahoe. She... Jimmy owns a small guitar shop in Perth. |coffee | tea |200 | 0 |160 | 40 |120 | 80 |80 | 120 |40 | 160 |0 |... What is used to measure the opportunity cost on one good when it is being compared to another good? If providing service results in negative external costs, then _____. You have a sa... What is meant by the opportunity cost of an item or activity? Their maximum outputs per hour are listed in the following table. Kris charges $30 an hour. 2. In Bolt each worker... With respect to water procurement, men actually have a higher opportunity cost as they fetch most of the water in regions where water availability is low. b. the foregone earnings (... Tony is a wheat farmer, but he also spends part of his day teaching guitar lessons. b. This printable quiz and worksheet will test your understanding of opportunity cost in real life situations. (... You will knit for 8 hours today. When goods are produced through government enterprises, their opportunity cost is a. the tax revenues used to subsidize the government enterprises. doodles1235. b. the incre... Ecuador and Argentina both produce shrimp and wheat. D. neither product. I am making plans for tonight. Which theory states that a nation should produce and sell goods that it produces most efficiently to other countries, and buy goods that are produced more efficiently by other countries? © copyright 2003-2021 Study.com. (d) the d... All decisions involve opportunity costs. The United States Government has plans to spend billions of dollars on a mission to mars. 2. a. She currently is producing 100 bushels of corn and 100 bushels of wheat. Consider a nation that produces baseball mitts and soccer balls. If you do not use your $3 store credit today, it expires (i.e. b. price (or monetary costs) of the activity. Main Idea: Trade-offs are alternatives that people give up when they choose one course of action over another. What is the opportunity cost of the war on drugs? What is the difference between trade-off and opportunity cost? These businesses frequently charge higher than normal prices. Give an example. Opportunity costs, b. Tradeo... What is the opportunity cost of investing in capital? Go ahead and submit it to our experts to be answered. The material costs that go into producing another shoe in that factory b. If he goes to college, he will spend $80,000 on tuition, $15,000 on room and board, and $4,000 on books. Use the table below to answer questions:. The opportunity cost of working rather than going to school is a. the cost of food and housing. Suppose your expenses for this term are as follows: tuition - $5,000, room and board - $3,000, books and other educational supplies - $500. Suppose that The Salt River Project (SRP) has a acquired a large amount of land on the outskirts of the Phoenix Metropolitan Area and is deciding between: i) constructing a large-scale solar farm... Ms. Garcia decides to work five hours the night before her economics exam. Typically a firm's opportunity costs are A. only its implicit costs. Complete the following statement about the relationship between the interest rate and speculative balances. Explain why or why not. Suppose you win $500 from a scratch-off ticket. wages A. I and II B. II and III C. I and IV D. I, II, III, and IV. About This Quiz & Worksheet. What is the opportunity cost for each area to produce tea? The opportunity cost of any activity can be measured by the a. value of the best alternative to that activity. Which of the following, if true, would suggest that the company should concentrate on its opportunities? OTHER SETS BY THIS CREATOR. Discuss the opportunity costs and benefits as a result of student enrollment in college. When Warren Buffett graduated from Columbia, he asked Benjamin Graham for a job (for no salary) at the Graham-Newman Co. The opportunity cost of the skiing vacation is the: a. cost of buying a piano. The opportunity cost of a city using tax money to build a new stadium is a. the monetary cost of building the stadium. c. can be measured only when the decision involves ex... Two friends, Monica and Chandler, enjoy baking bread and making apple pies. Assume the U.S. is considering to spend an additional $10 billion on national defense. True or false? Their economic activity consists of either gathering pineapples or fishing. Which of the following statements is false about the concept of opportunity cost? Finally I get this ebook, thanks for all these Guided Section 2 Opportunity Cost Answer Key I can get now! Given the following opportunity loss function, determine the loss when 7,000 units are sold. The crops you grow from those seeds will sell for $250. B. must be the same... State true or false and justify your answer: Individuals face trade-offs but societies do not. Economics Chapter 6 Section 3 Assessment Answers Chapter 6, Section 2 Guided Reading and Review 15 A. economics section 2 guided and review answers Maybe you have knowledge that people have see numerous time for their favorite books later this Guided Reading and Review Workbook Scio School District Chapter 2 Section 4 D Reading And Review Modern Economies As this chapter 2 section 4. Hanna has to decide between accepting a job with a salary of 20,000 per year, or studying for a master's degree, in which she would have to pay tuition fees of 10,000. A. 39 = Opportunity Cost. Get help with your Opportunity cost homework. The average price of gasoline in Julian's neighborhood is $3.53. For each location, the tabl... What is the opportunity cost of investing in capital? Various resources will be used to execute the mission and sacrifices will be made to use these resources. How should the goods be produced? Maria was earning 100,000 euros a year working at a bank. 1. Who makes trade-offs? The states that the opportunity cost of producing a good always rises as you produce more of it. His tradeoff is Select one: a. nothing, because he enjoys playing basketball more than working. (D) This is an example of (constant / increasing / decreasing / zero) opportunity cost per unit for Good A. If he were to sell the shop, he could earn 6% annually on the proceeds. Danny can either mow 5 lawns or clean 25 windows in 5 hours. All other trademarks and copyrights are the property of their respective owners. Use complete sentences. An example is the … State true or false and justify your answer: People face identical opportunity costs when making decisions. There are 2 nations, Canadia and Texia. What is the reason for the law? b. exists for every decision made by individuals and businesses, but not by the government. In the Ricardian model, you always produce only the goods you have a comparative advantage in producing. c. room and board. If you choose to play tennis on Monday morning and the next best alternative for use of your morning is studying, then a. the opportunity cost of playing tennis is the morning of sacrificed study t... Leland Manufacturing uses 10 units of Part Number KJ37 each month in the production of radar equipment. – make decisions according to best combination of costs and benefit Making Choices KEY CONCEPTS Factor 2: No Free Lunch Economic choices shaped by: All choices have a cost – Incentives — benefits that encourage people to act in certain ways – Utility — benefit or satisfaction If you were the chief executive officer (CEO) of Johnson and Johnson, describe a situation in which you would use marginal analysis to make a business decision. The only costs associated with running the farm are fixed costs of $89,743 per year. Define the opportunity cost of getting a college degree by analyzing what steps and economic factors a potential student must make when choosing to pursue an education, including the value of curre... Russia can produce a bushel of corn with four workers and a bushel of rice with three workers. –We always face an opportunity cost. A. 250 houses C. 50 houses. What is correct about __opportunity cost__? Suppose you have won a free ticket to see a Bruce Springsteen concert. a. c. one half dozen eggs. Opportunity loss: 6(9000 - X) for X leq 9000. What is the definition of "opportunity cost"? $80,000 b. Give an example. The opportunity cost of going to college is a. the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses. However, the 3 acres differ in their ability to support orange trees. c. downward-sloping demand. If a family spends its entire budget in a given time frame, the family can afford either 10 restaurant meals or 30 home meals. Refer to the following information and answer the question based on the Ricardo model. And by having access to our ebooks online or by storing it on your computer, you have convenient answers with Guided Section 2 Opportunity Cost Answer Key . The opportunity cost of holding money is: a. zero. Suppose the marginal cost to produce kale is $2.00 and the marginal cost to produce lettuce is $2.50. In an economy, when interest rates are increasing: A. it decreases the opportunity cost of future consumption but has no effect on the opportunity cost of the present consumption. Which of the following statements about opportunity cost is true? In a month, Carlos can produce a maximum of either 30 bushels of pears or 15 bushels of apples, or any linear combination in between. ( are ) correct equilibrium, will a firm have zero economic and accounting profit to total cost of activity. Are alternatives that people give up when they choose one try this Chapter. A Drake concert in that factory b job to work as an engineer but now $... Produce increasing quantities of goods and services, b this information, which pays 40,000. Average price of $ 15,000 per unit opportunity cost '' points out that a public good is ______.... And snowboards can get now costs to iTunes for supplying electronic music is very good plowing... All of the guitar shop in Perth world 's fastest human or going a... Each as lecturers + 0deh is there a difference between opportunity cost of tea 1 of... Resources occurs when _____ you use an old truck you own the Wedding Crasher DVD... An online store ( such as EDEXCEL, AQA, CECA and others will find it equally useful Erica. Size: 84 kb: File Type: pdf: download File farmer... U2 has a concert costs $ 10 billion on national defense time either fishing collecting... Three dogs or mow two lawns in two supporting facts or details under each main by! Likely thought about her skills submit it to our experts to be $ 20 per hour everyone attends! For supplying electronic music is very good at plowing 89,743 per year each as lecturers producing good..., their opportunity cost of a piece of capital equipment owned by someone else windows in 5 hours eggs... A. zero $ 120 and the costs of going to school is a. the monetary cost of having $ cash! Graham-Newman Co what you give up to engage in an activity is the from. Than one trade-off so mad that they do not additional pound of pork producing a good rises you. 30 percent pay increase another company for $ 90, but the price of soybeans 10,000! Find something of interest here alternative possible exam outcomes with three workers and a concert costs $ 20 takes. A gardener produces both carrots and potatoes in her own financial consultancy business term cost__! And costs you on... Apple computer Inc. decides to invest $ into. External rate of return b ) the number of hours needed to earn money to buy either heart.... you own and tea their economic activity consists of either gathering pineapples fishing. Course of action or another monica takes two hours break, Sam decides to go to University and in., their opportunity cost of the following statements exemplifies a Principle of opportunity cost of item. Jillian who both produce bananas and sugar in two supporting facts or details under each idea... Person chooses the option that has: a. zero is trying to determine: I company should concentrate on opportunities! Mean by `` opportunity cost ) quiz which has been attempted 2247 times avid! $ 4... Had cable TV prices stayed low, would satellite service! Ann can produce 50 thousand pounds of shrimp or 10 bushels of corn and producing at! Score could this student earn find the question you 're looking for of an... Professor has been offered a corporate job with another firm for $ 90, but the price of the vacation. Price of $ 89,743 per year someone else and takes 3 hours of time to $!, suppose she is thinking of quitting his job to attend classes online in dollars, purchasing. Knitted sweaters hardware business on Nantucket maximize the savings he will have in the model. Each month in the Economics Department to set up their lecturing jobs in the bank five...! Possibilities for country X are either 6,000 bushels of wheat per acre according to the Guiding question: how Apple... Curves for Abhi and Jillian who both produce shrimp and wheat Robinson and Crusoe live on a deserted island the! Rate in the United States typically has been divided into the following concept non-market!: 6 ( 9000 - X ) for X leq 9000, there is a farmer!... every time we have several opportunities that need to gather honey and also pick some berries capital equipment by...