What Is The Opportunity Cost Of Repairing One Transmission

CHAPTER two

Mod Principles of Economics:

The Power of Trade and Comparative Advantage

Facts and Likewisels

1. Utilize the thought of the "partition of knowledge" to answer thursdaydue east following questions.

a. Which country hadue south more knowledge: Utopia, where in the words of Karl Marx, each person knows just

enough about hunting, fishing, and cattle raising to "hunt in the chiliadorning, fish in the afternoon, [and]

rear cattle in the evening," or Drudgia, whereast one-3rd of the population learns just about hunting,

one-third only about fishing, and one-3rd only about cattle raising?

b. Which planet has more knowledge: Xeroxia, each of whose 1 million inhabitants knows the same

list of one million facts, or Differentia, whose one 1000000 inhabitants each know a different set of ane

million facts? How many facts are known in Xeroxia? How many facts are known in Differentia?

Solution

1. a. In that location is more knowledge in Drudgia.

b. In Xeroxia, people know one million facts. In Differentia, people know one trillion facts, a million times

more. We would expect Differentia to have a higher standard of living.

ii. In the Wealth of Nations, Adam Smith said that i reason specialization makes someondue east more

productive is considering "a man commonly saunters a little in turning his hand from 1 sort of

employment to another." How can you use this observation to improve your pattern of studying for

your iv or five college courses this semester?

Solution

two. You should set aside long blocks of time (perhaps 1 to ii hours) for each individual course, rather than

switching every fifteen minutes from reading biology to reading economics and back once again. E'ery fourth dimension you

switch jobs, you waste some time one thousandetting used to the new task.

3. "Opportunity price" is one of the tougher ideas in economics. Permit'southward make it easier by starting with

some simple examples. In the following examples, find the opportunity price: Your answer should be a

rate, as in "1.5 widgets per twelvemonth" or "6 50ectures per calendar month." Ignoring Adam Smith'due south insight from the

previous question, assume that these relationships are simple linear ones, and so that if you put in twice the

time yous become twice the output, and half the fourth dimension yields half the output.

a. Erin has a choice between two activities: She can repair one transmission per hr or she can repair

two fuel injectors per hour. What is the opportunity price of repairink one manual?

b. Katie works at a customer service center and every hour she has a choice between two activities:

answering 200 telephone calls per hour or responding to four00 emails per hour. Wlid is the opportunity

cost of responding to 400 phone calls?

Source: https://www.studocu.com/en-us/document/utah-state-university/intro-microeconomics-bss/chapter-2-solutions/11794799

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