Question

1. What opportunity costs did you incur in reading this chapter? If you read another chapter today, would your opportunity costs (per chapter) increase? Explain. (LO 01-01)
2. Why did both presidents Obama and Trump reduce spending on America’s space exploration program? (LO 01-02)
3. Can we continue to produce more output every year? Is there a limit? (LO2-3)
4. Why are incomes so much more unequal in poor nations than in rich ones? (LO2-4)

5. With respect to the demand for college enrollment, which of the following would cause (1) a movement along the demand curve or (2) a shift of the demand curve? (LO3-4)

   1. An increase in incomes.

   2. Lower tuition.

   3. More student loans.

   4. An increase in textbook prices.

Answer 1

Answer (a): Opportunity cost refers to the virtual cost of the sacrificing the alternative or the next best alternative by choosing the first choice among the alternatives.

                      If we read another chapter today, to whether our opportunity cost would increase or not, would depend on the satisfaction we derive out of reading another chapter in correspondence to reading the first chapter. If out of the two chapters we have read, the Second chapter has given us more satisfaction, then the lesser satisfaction derived out of reading the first chapter would be the opportunity cost here.

Answer (b): The real motive behind the reduction of space exploration program can hardly be attributed to common discussion on military or Government objectives, however, we can naturally assume that the motive behind the reduction of space exploration program could be to do with increasing the Government investment on improving the social conditions of the common American citizen and larger steps taken for the economic benefit of the nation.

Answer (c) : There is always a limit to producing outputs every year, wherein the available resource crunch in the production of goods, services or output would be the primary obstacle in this regard. Moreover, this can also be hindered by the other economic factors of productivity which directly impact the production of output, goods or services.

Answer (d): Incomes are generally so much unequal in the poor nations as compared to the richer nations because in the poorer nations their economic stability is far lesser in regards to their population and the available resources in the country are also far lesser utilized than that in a richer nation, thereby making the possibility of earning income for the common people much more difficult in the poor countries that in the richer countries.

Answer (e): With respect to the demand for the college enrollment the most important factor that would cause the movement along the demand curve or a potential shift of the demand curve would be an increase in the income level of the common people. The higher is the income level, the higher would be the demand for the college enrollment and the lesser the income level more would be the decrease in the preference of the common people towards college enrollments.