The calculation of the opportunity cost .

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Answer 1

Question

Chapter 10, Problem 1SPA

To determine

The calculation of the opportunity cost.

Expert Solution & Answer

Explanation of Solution

The opportunity cost of a firm includes the cost of the resources owned by the firm, the cost of resources supplied by the firm’s owner, and the cost of using the resources bought in the market.

The opportunity cost of JJVB includes the following as mentioned in table 1:

Table 1

Particulars	Cost (in $)
Wages paid	20,000
Interest forgone on $50,000 which could be used to pay for mortgage loan	3,000 (50,000×6100)
Income forgone	30,000
Leisure forgone	15,000 (30×500)
Depreciation cost of equipment	2,000 (30,000−28,000)
Goods and services bought from other firms	10,000
Total opportunity cost	80,000

The total opportunity cost of JJVB is $80,000.

Economics Concept Introduction

Opportunity cost: The opportunity cost is the cost of the foregone alternative, that is, the loss of other alternative when one alternative is chosen.

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Students have asked these similar questions

3. Answer the following questions about external wealth. a. Home has external wealth of $100 million in period t. In t+1, Home purchases $160 million foreign assets, and Foreign purchases $120 million in Home assets. Assume a world interest rate of 10% per annum. Compute the "change" in external wealth at t+1 for Home. b. A country's external wealth was -$1.5 billion at the end of 2015, and its trade balance was $750 million in 2016. Assume the world interest rate is 5% per annum. What is the "value" of a country's external wealth at the end of 2016?

1. The table below shows a country's hypothetical national income and product accounts data. Category Consumption (personal consumption expenditures) Investment (gross private domestic investment) Government consumption (government expenditures) Exports Imports Net Factor Income from Abroad Net unilateral transfers Billions of Dollars 8,000 1,300 2,100 900 1,750 +45 -20 a. Compute the following accounts using the information in the table: Gross national expenditure (GNE) . Trade balance (TB) • Gross domestic product (GDP) • Gross national income (GNI) . Gross national disposable income (GNDI) Current account (CA) b. Derive the current account identity using the national income identity. Are savings greater than or smaller than investment in this country? The national income identity is: GNDIGNE + CA, GNE = C + G + I.

4. Assume that a country produces an output Q of 50 every year. The world interest rate is 10%. Consumption C is 50 every year, and I = G = 0. There is an unexpected drop in output in year 0, so output falls to 28 and is then expected to return to 50 in every future year. If the country desires to smooth consumption, how much should it borrow in period 0? What will the new level of consumption be from then on?

Answer 2

Question

Chapter 10, Problem 1SPA

To determine

The calculation of the opportunity cost.

Expert Solution & Answer

Explanation of Solution

The opportunity cost of a firm includes the cost of the resources owned by the firm, the cost of resources supplied by the firm’s owner, and the cost of using the resources bought in the market.

The opportunity cost of JJVB includes the following as mentioned in table 1:

Table 1

Particulars	Cost (in $)
Wages paid	20,000
Interest forgone on $50,000 which could be used to pay for mortgage loan	3,000 (50,000×6100)
Income forgone	30,000
Leisure forgone	15,000 (30×500)
Depreciation cost of equipment	2,000 (30,000−28,000)
Goods and services bought from other firms	10,000
Total opportunity cost	80,000

The total opportunity cost of JJVB is $80,000.

Economics Concept Introduction

Opportunity cost: The opportunity cost is the cost of the foregone alternative, that is, the loss of other alternative when one alternative is chosen.

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Answer 3

Question

Chapter 10, Problem 1SPA

To determine

The calculation of the opportunity cost.

Expert Solution & Answer

Explanation of Solution

The opportunity cost of a firm includes the cost of the resources owned by the firm, the cost of resources supplied by the firm’s owner, and the cost of using the resources bought in the market.

The opportunity cost of JJVB includes the following as mentioned in table 1:

Table 1

Particulars	Cost (in $)
Wages paid	20,000
Interest forgone on $50,000 which could be used to pay for mortgage loan	3,000 (50,000×6100)
Income forgone	30,000
Leisure forgone	15,000 (30×500)
Depreciation cost of equipment	2,000 (30,000−28,000)
Goods and services bought from other firms	10,000
Total opportunity cost	80,000

The total opportunity cost of JJVB is $80,000.

Economics Concept Introduction

Opportunity cost: The opportunity cost is the cost of the foregone alternative, that is, the loss of other alternative when one alternative is chosen.

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Answer 4

Question

Chapter 10, Problem 1SPA

To determine

The calculation of the opportunity cost.

Expert Solution & Answer

Explanation of Solution

The opportunity cost of a firm includes the cost of the resources owned by the firm, the cost of resources supplied by the firm’s owner, and the cost of using the resources bought in the market.

The opportunity cost of JJVB includes the following as mentioned in table 1:

Table 1

Particulars	Cost (in $)
Wages paid	20,000
Interest forgone on $50,000 which could be used to pay for mortgage loan	3,000 (50,000×6100)
Income forgone	30,000
Leisure forgone	15,000 (30×500)
Depreciation cost of equipment	2,000 (30,000−28,000)
Goods and services bought from other firms	10,000
Total opportunity cost	80,000

The total opportunity cost of JJVB is $80,000.

Economics Concept Introduction

Opportunity cost: The opportunity cost is the cost of the foregone alternative, that is, the loss of other alternative when one alternative is chosen.

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

Answer 5

Chapter 10, Problem 1SPA

To determine

The calculation of the opportunity cost.

Expert Solution & Answer

Explanation of Solution

The opportunity cost of a firm includes the cost of the resources owned by the firm, the cost of resources supplied by the firm’s owner, and the cost of using the resources bought in the market.

The opportunity cost of JJVB includes the following as mentioned in table 1:

Table 1

Particulars	Cost (in $)
Wages paid	20,000
Interest forgone on $50,000 which could be used to pay for mortgage loan	3,000 (50,000×6100)
Income forgone	30,000
Leisure forgone	15,000 (30×500)
Depreciation cost of equipment	2,000 (30,000−28,000)
Goods and services bought from other firms	10,000
Total opportunity cost	80,000

The total opportunity cost of JJVB is $80,000.

Economics Concept Introduction

Opportunity cost: The opportunity cost is the cost of the foregone alternative, that is, the loss of other alternative when one alternative is chosen.

Answer 6

Chapter 10, Problem 1SPA

To determine

The calculation of the opportunity cost.

Expert Solution & Answer

Explanation of Solution

The opportunity cost of a firm includes the cost of the resources owned by the firm, the cost of resources supplied by the firm’s owner, and the cost of using the resources bought in the market.

The opportunity cost of JJVB includes the following as mentioned in table 1:

Table 1

Particulars	Cost (in $)
Wages paid	20,000
Interest forgone on $50,000 which could be used to pay for mortgage loan	3,000 (50,000×6100)
Income forgone	30,000
Leisure forgone	15,000 (30×500)
Depreciation cost of equipment	2,000 (30,000−28,000)
Goods and services bought from other firms	10,000
Total opportunity cost	80,000

The total opportunity cost of JJVB is $80,000.

Economics Concept Introduction

Opportunity cost: The opportunity cost is the cost of the foregone alternative, that is, the loss of other alternative when one alternative is chosen.

Answer 7

Chapter 10, Problem 1SPA

To determine

The calculation of the opportunity cost.

Answer 8

Expert Solution & Answer

Explanation of Solution

The opportunity cost of a firm includes the cost of the resources owned by the firm, the cost of resources supplied by the firm’s owner, and the cost of using the resources bought in the market.

The opportunity cost of JJVB includes the following as mentioned in table 1:

Table 1

Particulars	Cost (in $)
Wages paid	20,000
Interest forgone on $50,000 which could be used to pay for mortgage loan	3,000 (50,000×6100)
Income forgone	30,000
Leisure forgone	15,000 (30×500)
Depreciation cost of equipment	2,000 (30,000−28,000)
Goods and services bought from other firms	10,000
Total opportunity cost	80,000

The total opportunity cost of JJVB is $80,000.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Opportunity cost: The opportunity cost is the cost of the foregone alternative, that is, the loss of other alternative when one alternative is chosen.

Answer 12

Ch. 10.1 - Prob. 1RQ Ch. 10.1 - Prob. 2RQ Ch. 10.1 - Prob. 3RQ Ch. 10.1 - Prob. 4RQ Ch. 10.1 - Prob. 5RQ Ch. 10.2 - Prob. 1RQ Ch. 10.2 - Prob. 2RQ Ch. 10.2 - Prob. 3RQ Ch. 10.2 - Prob. 4RQ Ch. 10.3 - Prob. 1RQ

The calculation of the opportunity cost .

The calculation of the opportunity cost.

Explanation of Solution

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