1. In one hour John can produce either 4 units of good X or 12 units of good Y.
ID: 1132961 • Letter: 1
Question
1.
In one hour John can produce either 4 units of good X or 12 units of good Y. He works an 8 hour day. In his 8 hour day he can produce either___ units of good X or ___units of good Y. The opportunity cost of producing one unit of good X is ____ units of good Y. The opportunity cost of producing 12 units of good X is _____ units of good Y. If John wants to produce 12 units of good X then he will be able to produce at most____ units of good Y. Enter numbers rounded to two decimal places as necessary.
2.
Question 124 pts
The opportunity cost of buying a new car is best measured as:
3.
When people become more productive, the production possibilities frontier shifts inwards because it takes less time to produce each unit.
False
4.
If Congress votes to increase the minimum wage then unemployment is likely to rise. This is an example of a normative statement.
False
5.If Tom has a comparative advantage in producing corn then he must also have an absolute advantage in producing corn.
True
False
6.
When you stand in line for 20 minutes to buy groceries, the value of that time is:
an explicit cost.
7.Rhonda has hired a worker to stand on the corner and wave a sign advertising her business. It costs her $12 per hour to have this worker stand on the corner. Rhonda is trying to decide how many hours per day she should hire this worker to stand on the corner. Each customer spends an average of $4 when they visit her store. She has been tracking her daily customers as a function of the number of hours per day the worker waves the sign and has found the following information:
HOURS
PER DAY
TOTAL CUSTOMERS
0
50
1
65
2
75
3
81
4
85
5
88
When Rhonda hires the worker to wave the sign for one hour per day, the marginal cost is __$ and the marginal benefit is __$ .
When Rhonda hires the worker to wave the sign for two hours per day, the marginal cost of the second hour is ___$ and the marginal benefit of the second hour is __$ .
Enter whole numbers.
8.
Question 184 pts
John gives up a shift at work so he can go to Disney World with a friend. He spends $175 at Disney. He would have earned $100 during the shift at work. What is John's opportunity cost of going to Disney? Enter a whole number, such as 132.
the $20,000 you paid for the car.Explanation / Answer
Question 1
In one hour, John can produce 4 units of good X.
So,
In 8 hours, John can produce (4 * 8) 32 units of good X.
In one hour, John can produce 12 units of good Y.
So,
In 8 hours, John can produce (12 * 8) 96 units of good Y.
In one hour, John can produce either 4 units of good X or 12 units of good Y.
So,
The opportunity cost of producing 1 unit of good X is (12/4) 3 units of good Y.
The opportunity cost of producing 12 units of good X is (12 * 3) 36 units of good Y.
Using all the labor hours, John can produce a maximum of 96 units of good Y.
If John produces 12 units of good X then he has to sacrifice 36 units of good Y. This means that he would be able to produce (96 - 36) 60 units of good Y.
Thus,
In one hour John can produce either 4 units of good Xor 12 units of good Y. He works an 8 hour day.
In his 8 hours day, he can produce either 32 units of good X or 96 units of good Y.
The opportunity cost of producing one unit of good X is 3 units of good Y.
The opportunity cost of producing 12 units of good X is 36 units of good Y.
If John wants to produce 12 units of good X then he will be able to produce at most 60 units of good Y.
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