Questions 14 Chrome File Edit View History Bookmarks People

Questions 1-4

Chrome File Edit View History Bookmarks People Window Help C, Syllabus for ECON175-35175 ×Y Find Your Class 3896 Sun 8:44 PM a E x S SunGard Higher Education × y Principles of Macroeconomic x Sign Up C | scholar.flatworldknowledge.com/books/30123/prinoimacro-30126-20161026-133336-383859/read FlatWorld How do I highlight? Hello, ahmad Help Student StoreLogout Table of Contents Search this book... Read Study dea 1.1. Scarcity and Choice for Individuals Problem:s 1.2. Scarcity and Choice for the Economy as a Whole 1. Suppose that you are president of the student government, and you have to decide how to allocate a $20,000 fund for guest speakers for the year. Conan O\'Brien and Will Ferrell each cost $10,0oo per appearance, Stephen Colbert costs $20,00o per appearance, and former economic advisers to the government charge S1,ooo per lecture. Explain the economic problem of choice and scarcity in this case. What issues would you consider in arriving at a decision? 1.3. Market Economies and the Price System 1.4. End-of-Chapter Material 2. Michelle Wie, a teenage golf prodigy who earned $16 million in endorsements and $4 million in prize money and appearance fees in 2006, announced that she would enroll as a student at Stanford University in the fall of 2007. What was her opportunity cost of a year of college? How does it compare to your opportunity cost of a year of college? 2. Observing and Explaining the Economy 3. The Supply and Demand Model 4. Subtleties of the Supply and Demand Model 5. Macroeconomics: The Big Picture 6. Measuring the Production, Income, and . Allison will graduate from high school next June. She has ranked her three possible post- graduation plans in the following order: () work for two years at a consulting job in her hometown paying $20,oo0 per year, (2) attend a local community college for two years, spending $5,000 per year on tuition and expenses, and (3) travel around the world tutoring a rock star\'s child for pay of $5,o00 per year. What is the opportunity cost of her choice? 4. Suppose you have two boxes of chocolate chip cookies and a friend of yours has 2 gallons of milk. Explain how you can both gain from trade. Is this a gain from trade through better allocation or greater production? Spending of Nations 7. The Spending Allocation Model 8. Unemployment and Employment 5. Suppose Tina and Julia can produce brownies and romantic poems (which can be combined to make a lovely gift) in the following combinations in a given week: Tina PREVIOUS FLASHCARDS | QUIZ | DOWNLOADS NEXT >

Solution

The problem of choice here arises because 20000 can be used to purchase services of different experts. We have many individuals to choose. 20000 can be used in multiple uses here. But 20000 can\'t fetch services of all experts. Thus there is problem of scarcity. The issues that will be considered are to minimise costs and maximise benefits

2 16+4=20 million

3 reworks for 2 years at consulting job. Opportunity costs =5-5=0

Attend local college=20000+5000=25000

Travel around world=20000-5000=15000

So she will choose ist

4 I will sell one box of chips for 1 gallon of milk to friend. Thus we both will gain because we will not have excess and will gain variety in consumption. The result is due to better allocation.