Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 3, Problem 4MC
To determine
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Opportunity cost
Tony buys a pizza and with that same amount of money he could have bought a drink and a hot dog.
Jeremy has $30 in his pocket. He would like to take his friend to a movie. The movie would cost $20 for both him and his friend. Jeremy would also like to get a new shirt. The shirt would cost him $25. If Jeremy decides to buy the shirt, what would be his opportunity cost?
$25
The satisfaction of taking his friend to a movie
$20
The popcorn at the movie
Shannon has decided to spend less time on social media because she needs to improve her grades. What might be the opportunity cost of her decision?
Chapter 3 Solutions
Managerial Economics: A Problem Solving Approach
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- If your tuition is $5,000 this semester, your books cost $600, you can only work 20 rather than 40 hours per week during the 15 weeks you are taking classes and you make $15 per hour, and your room and board is $3000 this semester (same as if not attending college), then your opportunity.arrow_forwardA market's deadweight loss is calculated as: O the economic loss that a firm has when it is not producing its profit-maximizing output. O the price at equilibrium minus the price at actual quantity. the loss to consumers when a product malfunctions or fails to meet expectations. O the total economic surplus at the efficient quantity minus the total economic surplus at the actual quantity.arrow_forwardA student decision about how to allocate his time between studying two subjects ?arrow_forward
- A family have inherited £15,000 from a long lost aunt. They are weighing up whether to buy a new car or go on a trip to Australia for a month. They decide to go to Australia. The opportunity cost of this decision is a) the cost of going to Australia. b) the cost of a buying a new car. c) the benefits of going to Australia. d) the benefits of having a new car.arrow_forwardEvery week, Mary plays the piano for three hours, and her grade on each English test is 80 percent. Last week, after playing for three hours, Mary considered playing for another hour. She decided to play for another hour and cut her study time by one hour But last week, her English grade fell to 60 percent. Did Mary make her decision on the margin? OA Mary's decision was not made at the margin because she could have chosen not to play the piano but didn't OB. Mary's decision was not made at the margin because the marginal cost of a lower grade always exceeds its marginal benefit Oc. Mary's decision was made at the margin because her grade fell by only 20 percentage points OD Mary made her decision at the margin because she considered the benefit and cost of one additional hour of playing the piano OE Mary's decision was not made at the margin because she didn't compare the total benefit and total cost of a third hour of playing the pianoarrow_forwardYou win $100 in a basketball pool. You have a choice between spending the money now or putting it away for a year in a bank account that pays 5% interest. Which of the following is the opportunity cost of spending $100 now?arrow_forward
- When looking for which university you want to get admitted to you must have looked for information and then came to a decision. Explain this process using the rational decision-making processarrow_forwardOpportunity cost You decide to spend $80 on some great shoes and do not pay your electric billarrow_forwardRob decided to drive to school rather than take the school bus. What was the opportunity cost of Rob’s decision?arrow_forward
- Suppose you are in charge of snow removal in your community and you are trying to figure out if you should clear snow on a street. You survey the 20 people that live on that street who say they they each value having snow cleared on their street at $50 per year. The snow removal only costs $600 per year so you hire a snow plow and clear the snow that winter. When you ask for donations to pay for the snow removal you only receive $80. What does this result show? a The people on that street were free-riders. b The snow removal suffered from the Tragedy of the Commons problems. c The snow removal cost must have been greater than their economic benefit. d You must have overestimated the value of a fireworks show. Please suggest me right answer with explanationarrow_forwardIdentify three categories of opportunity costs that you will incur for getting a university degree.arrow_forwardRaad wants to sell his workout DVDS in the Middle East, Asian, and Latin African countries. will help him reach vendors abroad, without the expense of traveling to meet them face-to-face. A website and other technological advances B. Partnering with a large U.S recording studio C. The SBA (Small Business Administration) D. An incubator facilityarrow_forward
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