Answer the following questions: Your hard work was rewarded by a bonus payment of RMB 7000 from your employer. You decided to spend the entire RMB 7000 on buying a new Huawei cellphone although you have a less preferred option of going to Guangzhou for a short trip by spending RMB 5000. Is there an actual (explicit) cost of getting the Huawei phone? What is the opportunity cost concemed - RMB 0, RMB 5000 or RMB 7000? Explain your answer. [Hint: By explicit cost, consider if any money comes from your own pocket] If the decision to buy the cellphone remains valid, but there has been no bonus payment and you have to pay for the phone with your own money. Will the opportunity cost be different from your answer in part a.? Explain. You made a RMB 1000 deposit in your Piggy bank on getting a new iPhone priced at RMB 9000 (i.e. RMB 8000 has yet to be paid to get the phone) which you thought was totally worth it. Before completing the transaction, you came to realize that a new Huawei cellphone with unique satellite call function is in the market, making the iPhone now worth only RMB 6000 to you (still priced at RMB 9000). By thinking at the margin, indicate whether you will pay the money due and get the iPhone or just give up the option of purchasing it. Explain your argument. [Hint: Consider marginally or additionally the cost and benefit of taking an action - to buy the iPhone] a. b. c.
Answer the following questions: Your hard work was rewarded by a bonus payment of RMB 7000 from your employer. You decided to spend the entire RMB 7000 on buying a new Huawei cellphone although you have a less preferred option of going to Guangzhou for a short trip by spending RMB 5000. Is there an actual (explicit) cost of getting the Huawei phone? What is the opportunity cost concemed - RMB 0, RMB 5000 or RMB 7000? Explain your answer. [Hint: By explicit cost, consider if any money comes from your own pocket] If the decision to buy the cellphone remains valid, but there has been no bonus payment and you have to pay for the phone with your own money. Will the opportunity cost be different from your answer in part a.? Explain. You made a RMB 1000 deposit in your Piggy bank on getting a new iPhone priced at RMB 9000 (i.e. RMB 8000 has yet to be paid to get the phone) which you thought was totally worth it. Before completing the transaction, you came to realize that a new Huawei cellphone with unique satellite call function is in the market, making the iPhone now worth only RMB 6000 to you (still priced at RMB 9000). By thinking at the margin, indicate whether you will pay the money due and get the iPhone or just give up the option of purchasing it. Explain your argument. [Hint: Consider marginally or additionally the cost and benefit of taking an action - to buy the iPhone] a. b. c.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![1
Answer the following questions:
Your hard work was rewarded by a bonus payment of RMB 7000 from
your employer. You decided to spend the entire RMB 7000 on buying a new
Huawei cellphone although you have a less preferred option of going to
Guangzhou for a short trip by spending RMB 5000. Is there an actual (explicit)
cost of getting the Huawei phone? What is the opportunity cost concemned - RMB
0, RMB 5000 or RMB 7000? Explain your answer. [Hint: By explicit cost,
consider if any money comes from your own pocket]
If the decision to buy the cellphone remains valid, but there has been no
bonus payment and you have to pay for the phone with your own money. Will the
opportunity cost be different from your answer in part a.? Explain.
You made a RMB 1000 deposit in your Piggy bank on getting a new
iPhone priced at RMB 9000 (i.e. RMB 8000 has yet to be paid to get the phone)
which you thought was totally worth it. Before completing the transaction, you
came to realize that a new Huawei cellphone with unique satellite call function is
in the market, making the iPhone now worth only RMB 6000 to you (still priced
at RMB 9000). By thinking at the margin, indicate whether you will pay the
money due and get the iPhone or just give up the option of purchasing it. Explain
your argument. [Hint: Consider marginally or additionally the cost and benefit of
taking an action - to buy the iPhone]
a.
b.
C.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb8a9802b-ded9-4a7b-93c8-71218002814a%2Fc55fed2c-197c-4006-9493-ba70fce4eb66%2F8l9e7kl_processed.png&w=3840&q=75)
Transcribed Image Text:1
Answer the following questions:
Your hard work was rewarded by a bonus payment of RMB 7000 from
your employer. You decided to spend the entire RMB 7000 on buying a new
Huawei cellphone although you have a less preferred option of going to
Guangzhou for a short trip by spending RMB 5000. Is there an actual (explicit)
cost of getting the Huawei phone? What is the opportunity cost concemned - RMB
0, RMB 5000 or RMB 7000? Explain your answer. [Hint: By explicit cost,
consider if any money comes from your own pocket]
If the decision to buy the cellphone remains valid, but there has been no
bonus payment and you have to pay for the phone with your own money. Will the
opportunity cost be different from your answer in part a.? Explain.
You made a RMB 1000 deposit in your Piggy bank on getting a new
iPhone priced at RMB 9000 (i.e. RMB 8000 has yet to be paid to get the phone)
which you thought was totally worth it. Before completing the transaction, you
came to realize that a new Huawei cellphone with unique satellite call function is
in the market, making the iPhone now worth only RMB 6000 to you (still priced
at RMB 9000). By thinking at the margin, indicate whether you will pay the
money due and get the iPhone or just give up the option of purchasing it. Explain
your argument. [Hint: Consider marginally or additionally the cost and benefit of
taking an action - to buy the iPhone]
a.
b.
C.
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