QUESTION Suppose Lynda is going to finish her bachelor\'s degree in Jume 2018 an

Question

QUESTION Suppose Lynda is going to finish her bachelor's degree in Jume 2018 and considering whether to spend an extra year studying for a master's degree. What will be Lynda's opportunity cost of studying for a master's degree? a b If the economy in June 2018 is in recession, will Lynda be more or less likely to study for a master's degree? Explain Imagine an economy that produces only cars and bread. Refer to the following production possibility frontier (PPF to answer the questions below Bread 2000 18001 … 10001………. 250 500 00 Cars

Explanation / Answer

a) Lynda's opportunity cost would be the income forgone which could have been earned working for 1 year after completion of her Bachelor's degree.

b) If the economy is in recession, it would be more difficult to find a decent earning opportunity and the opportunity cost would be low. Hence, she would be more likely to study for a master's degree.

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