Chapter 3, Problem 1P

To determine

(a)

Whether higher levels of education for women will lead to an increase or decrease in the opportunity cost for mothers who decide not to work outside the home.

Explanation of Solution

The opportunity cost for a mother who chooses/decides not to work outside the home will be high if there are higher levels of education for women. This is because higher levels of education will ensure higher earnings for the women, thus the amount of earnings forgone by staying at home will increase for mothers, thus increased opportunity costs.

Economics Concept Introduction

Introduction:

Opportunity costs is the cost in terms of forgone benefit that a person could have received by choosing an alternative course of action.

To determine

(b)

Whether higher unemployment rates for women will lead to an increase or decrease in the opportunity costs for mothers who decide not to work outside the home.

Explanation of Solution

If the unemployment rates are higher, then there will be a decline in the opportunity costs for staying at home. Higher unemployment rates will mean lesser opportunity of getting a job, and therefore lower opportunity cost.

Economics Concept Introduction

Introduction:

Opportunity costs is the cost in terms of forgone benefit that a person could have received by choosing an alternative course of action.

To determine

(c)

Whether higher average pay levels for women will lead to an increase or decrease in the opportunity costs for mothers who decide not to work outside the home.

Explanation of Solution

The opportunity cost for forgoing job opportunities for staying at home will be higher if the average earnings of the women are higher as they will have to forgo higher amount of money.

Economics Concept Introduction

Introduction:

Opportunity costs is the cost in terms of forgone benefit that a person could have received by choosing an alternative course of action

To determine

(d)

Whether lower demand for labor in industries that traditionally employ women will lead to an increase or decrease in the opportunity costs for mothers who decide not to work outside the home.

Explanation of Solution

Lower demand for labor in industries that traditionally employ women will imply lower chances for women to get a job in the industry. Since they will not be able to get a job, the opportunity cost for staying at home is decreases in comparison to working.

Economics Concept Introduction

Introduction:

Opportunity costs is the cost in terms of forgone benefit that a person could have received by choosing an alternative course of action.