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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Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.

Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…

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.