The choice between now and one hundred years in the future.

Question

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Answer 1

Question

Chapter 2, Problem 1DQ

To determine

The choice between now and one hundred years in the future.

Expert Solution & Answer

Explanation of Solution

The extensive use of oil in today’s world is important because in the modern economy, almost all economic activities are dependent on oil. Moreover, there are many others uses of oil as well.

So, the welfare of the people would be degraded, and there will be stagnation in the economy. No import and export of goods over long distances would be possible, as transportation activity is totally dependent on the availability of fuel.

There are however opportunity costs associated with using alternatives to oil If oil is replaced with ethanol, then it wouldn't cause any damage to the environment and there would be a need to increase the cultivation of sugarcane, as ethanol is produced from sugarcane.

To increase the quantity of land for the cultivation of sugarcane, it would be required to decrease the quantity of land for the cultivation for other crops like rice, wheat, and maize. Therefore, it is important to decide whether ethanol is more important than other crops or not.Thus, there are two aspects that are required to be considered, which are scarcity and the alternative uses of oil.

Economics Concept Introduction

Concept introduction:

Opportunity cost:

If one alternative is chosen over another alternative, then there is a cost involved in choosing the respective alternative i.e. the cost of the foregone alternative. This foregone cost is known as the opportunity cost.

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CEO Salary and Firm SalesWe can estimate a constant elasticity model relating CEO salary to firm sales. The data set is the same one used in Example 2.3, except we now relate salary to sales. Let sales be annual firm sales, measured in millions of dollars. A constant elasticity model is[2.45]ßßlog (salary) = ß0 + ß0log (sales) + u,where ß1 is the elasticity of salary with respect to sales. This model falls under the simple regression model by defining the dependent variable to be y = log(salary) and the independent variable to be x = log1sales2. Estimating this equation by OLS gives[2.46]log (salary)^=4.822 + 0.257 (sales) n = 209, R2 = 0.211.The coefficient of log(sales) is the estimated elasticity of salary with respect to sales. It implies that a 1% increase in firm sales increases CEO salary by about 0.257%—the usual interpretation of an elasticity.

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Answer 2

Question

Chapter 2, Problem 1DQ

To determine

The choice between now and one hundred years in the future.

Expert Solution & Answer

Explanation of Solution

The extensive use of oil in today’s world is important because in the modern economy, almost all economic activities are dependent on oil. Moreover, there are many others uses of oil as well.

So, the welfare of the people would be degraded, and there will be stagnation in the economy. No import and export of goods over long distances would be possible, as transportation activity is totally dependent on the availability of fuel.

There are however opportunity costs associated with using alternatives to oil If oil is replaced with ethanol, then it wouldn't cause any damage to the environment and there would be a need to increase the cultivation of sugarcane, as ethanol is produced from sugarcane.

To increase the quantity of land for the cultivation of sugarcane, it would be required to decrease the quantity of land for the cultivation for other crops like rice, wheat, and maize. Therefore, it is important to decide whether ethanol is more important than other crops or not.Thus, there are two aspects that are required to be considered, which are scarcity and the alternative uses of oil.

Economics Concept Introduction

Concept introduction:

Opportunity cost:

If one alternative is chosen over another alternative, then there is a cost involved in choosing the respective alternative i.e. the cost of the foregone alternative. This foregone cost is known as the opportunity cost.

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Answer 3

Question

Chapter 2, Problem 1DQ

To determine

The choice between now and one hundred years in the future.

Expert Solution & Answer

Explanation of Solution

The extensive use of oil in today’s world is important because in the modern economy, almost all economic activities are dependent on oil. Moreover, there are many others uses of oil as well.

So, the welfare of the people would be degraded, and there will be stagnation in the economy. No import and export of goods over long distances would be possible, as transportation activity is totally dependent on the availability of fuel.

There are however opportunity costs associated with using alternatives to oil If oil is replaced with ethanol, then it wouldn't cause any damage to the environment and there would be a need to increase the cultivation of sugarcane, as ethanol is produced from sugarcane.

To increase the quantity of land for the cultivation of sugarcane, it would be required to decrease the quantity of land for the cultivation for other crops like rice, wheat, and maize. Therefore, it is important to decide whether ethanol is more important than other crops or not.Thus, there are two aspects that are required to be considered, which are scarcity and the alternative uses of oil.

Economics Concept Introduction

Concept introduction:

Opportunity cost:

If one alternative is chosen over another alternative, then there is a cost involved in choosing the respective alternative i.e. the cost of the foregone alternative. This foregone cost is known as the opportunity cost.

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Answer 4

Question

Chapter 2, Problem 1DQ

To determine

The choice between now and one hundred years in the future.

Expert Solution & Answer

Explanation of Solution

The extensive use of oil in today’s world is important because in the modern economy, almost all economic activities are dependent on oil. Moreover, there are many others uses of oil as well.

So, the welfare of the people would be degraded, and there will be stagnation in the economy. No import and export of goods over long distances would be possible, as transportation activity is totally dependent on the availability of fuel.

There are however opportunity costs associated with using alternatives to oil If oil is replaced with ethanol, then it wouldn't cause any damage to the environment and there would be a need to increase the cultivation of sugarcane, as ethanol is produced from sugarcane.

To increase the quantity of land for the cultivation of sugarcane, it would be required to decrease the quantity of land for the cultivation for other crops like rice, wheat, and maize. Therefore, it is important to decide whether ethanol is more important than other crops or not.Thus, there are two aspects that are required to be considered, which are scarcity and the alternative uses of oil.

Economics Concept Introduction

Concept introduction:

Opportunity cost:

If one alternative is chosen over another alternative, then there is a cost involved in choosing the respective alternative i.e. the cost of the foregone alternative. This foregone cost is known as the opportunity cost.

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 2, Problem 1DQ

To determine

The choice between now and one hundred years in the future.

Expert Solution & Answer

Explanation of Solution

The extensive use of oil in today’s world is important because in the modern economy, almost all economic activities are dependent on oil. Moreover, there are many others uses of oil as well.

So, the welfare of the people would be degraded, and there will be stagnation in the economy. No import and export of goods over long distances would be possible, as transportation activity is totally dependent on the availability of fuel.

There are however opportunity costs associated with using alternatives to oil If oil is replaced with ethanol, then it wouldn't cause any damage to the environment and there would be a need to increase the cultivation of sugarcane, as ethanol is produced from sugarcane.

To increase the quantity of land for the cultivation of sugarcane, it would be required to decrease the quantity of land for the cultivation for other crops like rice, wheat, and maize. Therefore, it is important to decide whether ethanol is more important than other crops or not.Thus, there are two aspects that are required to be considered, which are scarcity and the alternative uses of oil.

Economics Concept Introduction

Concept introduction:

Opportunity cost:

If one alternative is chosen over another alternative, then there is a cost involved in choosing the respective alternative i.e. the cost of the foregone alternative. This foregone cost is known as the opportunity cost.

Answer 6

Chapter 2, Problem 1DQ

To determine

The choice between now and one hundred years in the future.

Expert Solution & Answer

Explanation of Solution

The extensive use of oil in today’s world is important because in the modern economy, almost all economic activities are dependent on oil. Moreover, there are many others uses of oil as well.

So, the welfare of the people would be degraded, and there will be stagnation in the economy. No import and export of goods over long distances would be possible, as transportation activity is totally dependent on the availability of fuel.

There are however opportunity costs associated with using alternatives to oil If oil is replaced with ethanol, then it wouldn't cause any damage to the environment and there would be a need to increase the cultivation of sugarcane, as ethanol is produced from sugarcane.

To increase the quantity of land for the cultivation of sugarcane, it would be required to decrease the quantity of land for the cultivation for other crops like rice, wheat, and maize. Therefore, it is important to decide whether ethanol is more important than other crops or not.Thus, there are two aspects that are required to be considered, which are scarcity and the alternative uses of oil.

Economics Concept Introduction

Concept introduction:

Opportunity cost:

If one alternative is chosen over another alternative, then there is a cost involved in choosing the respective alternative i.e. the cost of the foregone alternative. This foregone cost is known as the opportunity cost.

Answer 7

Chapter 2, Problem 1DQ

To determine

The choice between now and one hundred years in the future.

Answer 8

Expert Solution & Answer

Explanation of Solution

The extensive use of oil in today’s world is important because in the modern economy, almost all economic activities are dependent on oil. Moreover, there are many others uses of oil as well.

So, the welfare of the people would be degraded, and there will be stagnation in the economy. No import and export of goods over long distances would be possible, as transportation activity is totally dependent on the availability of fuel.

There are however opportunity costs associated with using alternatives to oil If oil is replaced with ethanol, then it wouldn't cause any damage to the environment and there would be a need to increase the cultivation of sugarcane, as ethanol is produced from sugarcane.

To increase the quantity of land for the cultivation of sugarcane, it would be required to decrease the quantity of land for the cultivation for other crops like rice, wheat, and maize. Therefore, it is important to decide whether ethanol is more important than other crops or not.Thus, there are two aspects that are required to be considered, which are scarcity and the alternative uses of oil.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Concept introduction:

Opportunity cost:

If one alternative is chosen over another alternative, then there is a cost involved in choosing the respective alternative i.e. the cost of the foregone alternative. This foregone cost is known as the opportunity cost.

Answer 12

Ch. 2 - Prob. 1DQ Ch. 2 - Prob. 2DQ Ch. 2 - Prob. 3DQ Ch. 2 - Prob. 4DQ Ch. 2 - Suppose you are about to start an innovative,...Ch. 2 - Prob. 6DQ

The choice between now and one hundred years in the future.

The choice between now and one hundred years in the future.

Explanation of Solution

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Chapter 2 Solutions