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Owing to the rising cost of copper, in 1982 the U.S. Mint changed the composition of pennies from 95% copper (and 5% zinc) to 2.5% copper (and 97.5% zinc) to save money. Your favorite aunt has a collection of 4,500 pennies minted before 1982, and she intends on gifting the collection to you. a. What is the collection's value based on metal content alone? Copper sells for $3.25 per pound and zinc for $1.25 per pound. It takes approximately 130 pre-1982 pennies to add up to one pound of total weight. b. If it cost the U.S. Mint $0.017 to produce a penny in 2007, one can say that it is time to eliminate pennies and round off all financial transactions to the nearest 5 cents (nickel). As a matter of interest, it cost the government almost 10 cents to produce a nickel in 2007. What is likely to happen in this situation?

Owing to the rising cost of copper, in 1982 the U.S. Mint changed the composition of pennies from 95% copper (and 5% zinc) to 2.5% copper (and 97.5% zinc) to save money. Your favorite aunt has a collection of 4,500 pennies minted before 1982, and she intends on gifting the collection to you. a. What is the collection's value based on metal content alone? Copper sells for $3.25 per pound and zinc for $1.25 per pound. It takes approximately 130 pre-1982 pennies to add up to one pound of total weight. b. If it cost the U.S. Mint $0.017 to produce a penny in 2007, one can say that it is time to eliminate pennies and round off all financial transactions to the nearest 5 cents (nickel). As a matter of interest, it cost the government almost 10 cents to produce a nickel in 2007. What is likely to happen in this situation?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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**Text:** Owing to the rising cost of copper, in 1982 the U.S. Mint changed the composition of pennies from 95% copper (and 5% zinc) to 2.5% copper (and 97.5% zinc) to save money. Your favorite aunt has a collection of 4,500 pennies minted before 1982, and she intends on gifting the collection to you. **a.** What is the collection's value based on metal content alone? Copper sells for $3.25 per pound and zinc for $1.25 per pound. It takes approximately 130 pre-1982 pennies to add up to one pound of total weight. **b.** If it cost the U.S. Mint $0.017 to produce a penny in 2007, one can say that it is time to eliminate pennies and round off all financial transactions to the nearest 5 cents (nickel). As a matter of interest, it cost the government almost 10 cents to produce a nickel in 2007. What is likely to happen in this situation? **Explanation:** This text discusses the change in penny composition by the U.S. Mint due to copper's cost, and how this impacts the value of older pennies. It also raises questions about the cost-effectiveness of producing pennies and nickels, considering potential changes in financial transactions.
Transcribed Image Text:**Text:** Owing to the rising cost of copper, in 1982 the U.S. Mint changed the composition of pennies from 95% copper (and 5% zinc) to 2.5% copper (and 97.5% zinc) to save money. Your favorite aunt has a collection of 4,500 pennies minted before 1982, and she intends on gifting the collection to you. **a.** What is the collection's value based on metal content alone? Copper sells for $3.25 per pound and zinc for $1.25 per pound. It takes approximately 130 pre-1982 pennies to add up to one pound of total weight. **b.** If it cost the U.S. Mint $0.017 to produce a penny in 2007, one can say that it is time to eliminate pennies and round off all financial transactions to the nearest 5 cents (nickel). As a matter of interest, it cost the government almost 10 cents to produce a nickel in 2007. What is likely to happen in this situation? **Explanation:** This text discusses the change in penny composition by the U.S. Mint due to copper's cost, and how this impacts the value of older pennies. It also raises questions about the cost-effectiveness of producing pennies and nickels, considering potential changes in financial transactions.
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