Economics: Principles, Problems, and Policies (McGraw-Hill Series in Economics) 20th Edition Solution Manual

Preview (16 of 665 Pages)

100%

Purchase to unlock

Economics: Principles, Problems, and Policies (McGraw-Hill Series in Economics) 20th Edition Solution Manual - Page 1 preview image

Loading page ...

Chapter 01-Limits, Alternatives, Choices1-1Chapter 01-Limits, Alternatives, and ChoicesMcConnell Brue Flynn 20eDISCUSSION QUESTIONS1.What is an opportunity cost? How does the idea relate to the definition of economics? Whichof the following decisions would entail the greater opportunity cost: Allocating a square block inthe heart of New York City for a surface parking lot or allocating a square block at the edge of atypical suburb for such a lot? Explain.LO1Answer:An opportunity cost is what was sacrificed to do or acquire something else. Thecondition of scarcity creates opportunity cost. If there was no scarcity, there would be noneed to sacrifice one thing to acquire another.The opportunity cost would be much higher in New York City as the alternative uses forthat square block are much more valuable than for a typical suburban city block.2.Cite three examples of recent decisions that you made in which you, at least implicitly,weighed marginal cost and marginal benefit.LO1Answer:Student answers will vary, but may include the decision to come to class, toskip breakfast to get a few extra minutes of sleep, to attend college, or to make apurchase. Marginal benefits of attending class may include the acquisition of knowledge,participationindiscussion,andbetterpreparationforanupcomingexamination.Marginal costs may include lost opportunities for sleep, meals, or studying for otherclasses.In evaluating the discussion of marginal benefits and marginal costs, be carefulto watch for sunk costs offered as a rationale for marginal decisions.3.What is meant by the term “utility” and how does the idea relate to purposeful behavior?LO1Answer:“Utility” refers to the pleasure, happiness, or satisfaction gained from engagingin an activity (eating a meal, attending a ball game, etc.). It is an important component ofpurposeful behavior because people will allocate their scarce time, energy, and money inan attempt to gain the most utility possible.4.What are the key elements of the scientific method and how does this method relate toeconomic principles and laws?LO2Answer:The key elements include the gathering of data (observation), the formulation ofpossible explanations (hypothesis), testing the hypothesis, determining the validity of thehypothesis, and repeated testing of hypotheses that have appeared to be valid in priortests.The scientific method is the technique used by economists to determine economic laws orprinciples. These laws or principles are formulated to explain and/or predict behavior ofindividuals or institutions.

Preview Mode

This document has 665 pages. Sign in to access the full document!

Report

Study Now!

Document Details

Related Documents

Analysis of McDonald

The Effect of Exercise on Clothespin Squeezing

Analyzing Coca-Cola's Demand, Supply and Market St

Assignment 2: Market Forms

Emerging Economies and Globalization

Emerging Economies and Globalization

Economic Policy Recommendation

United States Fiscal Policy

Principles of Managerial Economics

Quantitative Analysis � International and Public Affairs

Company

Explore

Study Tools