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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Short Description Fiscal Policy Graph Details Shown is a Fiscal Policy diagram with the variable Real GDP (billions of dollars) on the x-axis and the variable Price Level on the y-axis. The x-axis is scaled from 0 to 800 billion dollars with an increment of 40 billion dollars, and the y-axis is scaled from 30 to 150 units with an increment of 5 units. Object Details On the graph we have:Four Line Objects:An upward sloping Aggregate Supply, AS line with two endpoints:Point 1 at (160, 70)Point 2 at (720, 140)A downward sloping Aggregate Demand, AD1 line with two endpoints:Point 1 at (80, 110)Point 2 at (640, 40)A vertical Long-run Aggregate Supply, LRAS with two endpoints:Point 1 at (400, 145)Point 2 at (400, 30)A downward sloping Aggregate Demand, AD line with two endpoints:Point 1 at (720, 60)Point 2 at (160, 130)Two Reference Points:Lines AS, AD, and LRAS intersect at (400, 100)Lines AS and AD1 intersect at (280, 85) a. How much does aggregate demand need to change to restore the…

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a. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? $ billion b. If the MPC is 0.6, how much does government purchases need to change to shift aggregate demand by the amount you found in part a? $ billion Suppose instead that the MPC is 0.95. c. How much does aggregate demand and government purchases need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $ billion and government purchases need to change by $ billion.

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.