Question

When you take the effort to dispute a parking ticket, you must take into account the cost of your time, which is called:

explicit cost

accounting cost

economic cost

opportunity cost

When making decisions, welfare is maximized when:

marginal cost equals opportunity cost

marginal cost equals marginal benefit

marginal cost equals total benefit

marginal cost equals total cost

If you paid $18 for an “unlimited play” pass at Boomers Fun Center, what is the marginal cost of the 3^rd round of mini-golf?

$18

$6

$3

$0

Instead of taking this exam, you could be home watching your favorite TV show. The value of watching this TV show is called the:

intrinsic value

explicit benefit

opportunity cost

alternative value

Instead of taking economics this term, you could have volunteered at a camp for kids, backpacked through Europe, or attended a marathon training camp. If you prefer volunteering more than backpacking, and prefer backpacking more than marathon training, what is your opportunity cost of taking this class?

The value gained from volunteering at the camp

The value gained from backpacking through Europe

The value gained from attending the marathon training camp

The sum of the value gained from all three activities

Answer 1

1. When you take the effort to dispute a parking ticket, you must take into account the cost of your time, which is called: OPPORTUNITY COST

It signifies the lost opportunity. If not for dispute, one would have put the time to some other use. This lost opportunity is the opportunity cost of the time used to dispute.

2. When making decisions, welfare is maximized when:  MARGINAL COST EQUALS MARGINAL BENEFIT

As welfare maximisation happens net benefits is maximised which happens at this point.

3. If you paid $18 for an “unlimited play” pass at Boomers Fun Center, what is the marginal cost of the 3rd round of mini-golf?

$0

As we have already paid $18 for unlimited pay. we will not be paying extra for round 3.So, the MC for 3rs round = $0.  

4. Instead of taking this exam, you could be home watching your favorite TV show. The value of watching this TV show is called the: OPPORTUNITY COST

5. Instead of taking economics this term, you could have volunteered at a camp for kids, backpacked through Europe, or attended a marathon training camp. If you prefer volunteering more than backpacking, and prefer backpacking more than marathon training, what is your opportunity cost of taking this class?

THE VALUE GAINED FROM VOLUNTEERING AT THE CAMP

The opoortunity cost is equal to the highest alternate cost. And out of the 3, highest cost is associated with volunteering at camp.