The opportunity cost and its relevance to economics.

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Answer 1

Question

Chapter 1, Problem 1DQ

To determine

The opportunity cost and its relevance to economics.

Expert Solution & Answer

Explanation of Solution

Since the opportunity cost is the next best alternatives, it is the given up benefit in order to obtain some other benefits.

Resources are scarcely available to satisfy the human needs. The reason is that the human needs are unlimited. The resources can be used for different purposes.

For example, Land is limited in availability and assumes that the land is used for cultivating of wheat and rice. If the land is used to cultivate wheat, then rice production has to been given up from that particular land. Thus, the scarcity of resource creates the opportunity cost. If available resources are enough to satisfy the human needs, then there is no opportunity cost.

The revenue generated from the land located at the center of New York City, is greater than the revenue generated from the land that located at suburb. If the mall is build, then it can generate more revenue than the revenue generated from the parking lot. At the same time, the revenue generating from the mall that located at suburb is lower than the mall located at centre of the New York City. Thus, the opportunity cost of building a parking lot at New York City is greater than the building a parking lot at suburb.

Economics Concept Introduction

Concept introduction:

Opportunity cost: Opportunity cost refers to the given up benefits in the process of obtaining some other benefit.

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Consider the simple discrete job search model that we studied in class. Only the unemployed can receive one offer per period from F(w) that is a uniform distribution on [0,2]. There is a constant probability of being laid off at the end of each period while employed. Assume that she can get a new offer right away when laid off. We want to understand the reservation wage, WR, in this model. Assume that u(c) = c. The parameters are a discount factor ẞ and an unemployment benefit b.R and show that T is contraction on [0, ∞). Explicitly state any additional assumptions that you may need.(Grading guide line: 5pt for the exact form of T, 10pt for showing contraction, and 5pt for stating correct assumptions.)< (b) Discuss why (a) is useful to understand the reservation wage wд in this economy.< (c) We write WR = WR (b,ẞ,λ) to reveal its dependence on (b,ẞ,λ). Show that 0 ≤ aWR дь OWR дл ≤1 and ≥0. What about ? awR ав State any additional assumptions that you may need.< (d) Briefly explain the…

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Answer 2

Question

Chapter 1, Problem 1DQ

To determine

The opportunity cost and its relevance to economics.

Expert Solution & Answer

Explanation of Solution

Since the opportunity cost is the next best alternatives, it is the given up benefit in order to obtain some other benefits.

Resources are scarcely available to satisfy the human needs. The reason is that the human needs are unlimited. The resources can be used for different purposes.

For example, Land is limited in availability and assumes that the land is used for cultivating of wheat and rice. If the land is used to cultivate wheat, then rice production has to been given up from that particular land. Thus, the scarcity of resource creates the opportunity cost. If available resources are enough to satisfy the human needs, then there is no opportunity cost.

The revenue generated from the land located at the center of New York City, is greater than the revenue generated from the land that located at suburb. If the mall is build, then it can generate more revenue than the revenue generated from the parking lot. At the same time, the revenue generating from the mall that located at suburb is lower than the mall located at centre of the New York City. Thus, the opportunity cost of building a parking lot at New York City is greater than the building a parking lot at suburb.

Economics Concept Introduction

Concept introduction:

Opportunity cost: Opportunity cost refers to the given up benefits in the process of obtaining some other benefit.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 1, Problem 1DQ

To determine

The opportunity cost and its relevance to economics.

Expert Solution & Answer

Explanation of Solution

Since the opportunity cost is the next best alternatives, it is the given up benefit in order to obtain some other benefits.

Resources are scarcely available to satisfy the human needs. The reason is that the human needs are unlimited. The resources can be used for different purposes.

For example, Land is limited in availability and assumes that the land is used for cultivating of wheat and rice. If the land is used to cultivate wheat, then rice production has to been given up from that particular land. Thus, the scarcity of resource creates the opportunity cost. If available resources are enough to satisfy the human needs, then there is no opportunity cost.

The revenue generated from the land located at the center of New York City, is greater than the revenue generated from the land that located at suburb. If the mall is build, then it can generate more revenue than the revenue generated from the parking lot. At the same time, the revenue generating from the mall that located at suburb is lower than the mall located at centre of the New York City. Thus, the opportunity cost of building a parking lot at New York City is greater than the building a parking lot at suburb.

Economics Concept Introduction

Concept introduction:

Opportunity cost: Opportunity cost refers to the given up benefits in the process of obtaining some other benefit.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 1, Problem 1DQ

To determine

The opportunity cost and its relevance to economics.

Expert Solution & Answer

Explanation of Solution

Since the opportunity cost is the next best alternatives, it is the given up benefit in order to obtain some other benefits.

Resources are scarcely available to satisfy the human needs. The reason is that the human needs are unlimited. The resources can be used for different purposes.

For example, Land is limited in availability and assumes that the land is used for cultivating of wheat and rice. If the land is used to cultivate wheat, then rice production has to been given up from that particular land. Thus, the scarcity of resource creates the opportunity cost. If available resources are enough to satisfy the human needs, then there is no opportunity cost.

The revenue generated from the land located at the center of New York City, is greater than the revenue generated from the land that located at suburb. If the mall is build, then it can generate more revenue than the revenue generated from the parking lot. At the same time, the revenue generating from the mall that located at suburb is lower than the mall located at centre of the New York City. Thus, the opportunity cost of building a parking lot at New York City is greater than the building a parking lot at suburb.

Economics Concept Introduction

Concept introduction:

Opportunity cost: Opportunity cost refers to the given up benefits in the process of obtaining some other benefit.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 1, Problem 1DQ

To determine

The opportunity cost and its relevance to economics.

Expert Solution & Answer

Explanation of Solution

Since the opportunity cost is the next best alternatives, it is the given up benefit in order to obtain some other benefits.

Resources are scarcely available to satisfy the human needs. The reason is that the human needs are unlimited. The resources can be used for different purposes.

For example, Land is limited in availability and assumes that the land is used for cultivating of wheat and rice. If the land is used to cultivate wheat, then rice production has to been given up from that particular land. Thus, the scarcity of resource creates the opportunity cost. If available resources are enough to satisfy the human needs, then there is no opportunity cost.

The revenue generated from the land located at the center of New York City, is greater than the revenue generated from the land that located at suburb. If the mall is build, then it can generate more revenue than the revenue generated from the parking lot. At the same time, the revenue generating from the mall that located at suburb is lower than the mall located at centre of the New York City. Thus, the opportunity cost of building a parking lot at New York City is greater than the building a parking lot at suburb.

Economics Concept Introduction

Concept introduction:

Opportunity cost: Opportunity cost refers to the given up benefits in the process of obtaining some other benefit.

Answer 6

Chapter 1, Problem 1DQ

To determine

The opportunity cost and its relevance to economics.

Expert Solution & Answer

Explanation of Solution

Since the opportunity cost is the next best alternatives, it is the given up benefit in order to obtain some other benefits.

Resources are scarcely available to satisfy the human needs. The reason is that the human needs are unlimited. The resources can be used for different purposes.

For example, Land is limited in availability and assumes that the land is used for cultivating of wheat and rice. If the land is used to cultivate wheat, then rice production has to been given up from that particular land. Thus, the scarcity of resource creates the opportunity cost. If available resources are enough to satisfy the human needs, then there is no opportunity cost.

The revenue generated from the land located at the center of New York City, is greater than the revenue generated from the land that located at suburb. If the mall is build, then it can generate more revenue than the revenue generated from the parking lot. At the same time, the revenue generating from the mall that located at suburb is lower than the mall located at centre of the New York City. Thus, the opportunity cost of building a parking lot at New York City is greater than the building a parking lot at suburb.

Economics Concept Introduction

Concept introduction:

Opportunity cost: Opportunity cost refers to the given up benefits in the process of obtaining some other benefit.

Answer 7

Chapter 1, Problem 1DQ

To determine

The opportunity cost and its relevance to economics.

Answer 8

Expert Solution & Answer

Explanation of Solution

Since the opportunity cost is the next best alternatives, it is the given up benefit in order to obtain some other benefits.

Resources are scarcely available to satisfy the human needs. The reason is that the human needs are unlimited. The resources can be used for different purposes.

For example, Land is limited in availability and assumes that the land is used for cultivating of wheat and rice. If the land is used to cultivate wheat, then rice production has to been given up from that particular land. Thus, the scarcity of resource creates the opportunity cost. If available resources are enough to satisfy the human needs, then there is no opportunity cost.

The revenue generated from the land located at the center of New York City, is greater than the revenue generated from the land that located at suburb. If the mall is build, then it can generate more revenue than the revenue generated from the parking lot. At the same time, the revenue generating from the mall that located at suburb is lower than the mall located at centre of the New York City. Thus, the opportunity cost of building a parking lot at New York City is greater than the building a parking lot at suburb.