Explanation a. More people choose to get graduate degree when the job market is poor. In the given case, a higher education will enable a person to get higher remuneration in future but at present completing graduate degree will incur cost. As the job market is poor, then going for a job will not provide satisfying income. Thus, the opportunity cost of not going for a job and getting a graduate degree is low. b. More people choose to do their own home repairs when the economy is slow and hourly wages are down. In the given case when the economy is slow and hourly wages are low then people will not spend more time in working for extra hours because those extra hours will not give them satisfying wages. Therefore, people will indulge in their own home repairs instead of spending more hours at job and get less wages. As the opportunity cost of own home repairs is more than the opportunity cost of working at low hourly wages. c. There are more parks in suburban area than in urban area. The urban area tends to have more population as compared to the suburban area therefore; the cost of land will be higher in urban area. Thus, opportunity cost of developing parks in urban area will be more as compared to suburban area...

5th Edition

ISBN: 9781319098759

Author: Paul Krugman, Robin Wells

Publisher: Worth Publishers

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Question

Chapter 1, Problem 4P

To determine

the opportunity cost of each choice

Concept Introduction:

Opportunity Cost: If one alternative is chosen over another alternative then there is a cost for choosing an alternative or the cost of forgone alternative. This forgone cost is said as the opportunity cost.

Expert Solution & Answer

Chapter 1 Solutions

Macroeconomics

Ch. 1 - Prob. 1QFT Ch. 1 - Prob. 1P Ch. 1 - Prob. 2P Ch. 1 - Prob. 3P Ch. 1 - Prob. 4P Ch. 1 - Prob. 5P Ch. 1 - Prob. 6P Ch. 1 - Prob. 7P Ch. 1 - Prob. 8P Ch. 1 - Prob. 9P

Ch. 1 - Prob. 10P Ch. 1 - Prob. 11P Ch. 1 - Prob. 12P Ch. 1 - Prob. 13P Ch. 1 - Prob. 14P Ch. 1 - Prob. 15P Ch. 1 - Prob. 16P

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