Answer to Question #127952 in Microeconomics for kamar

Question

1. For each of the following,describe some of the potential opportunity costs: a. Studying for your economics test b. Spending 2 hours playing computer games c. Buying a new car instead of keeping the old one d. A local community voting to raise property taxes to increase school expenditures and to reduce class size e. A number of countries working together to build a space station f. Going to graduate school

Answer 1

a) Studying for your economics test.

The opportunity cost is the leisure time we forego as one studies for the test, wages that one could receive by working somewhere.

b) Spending 2 hours playing computer games.

The opportunity cost are utilizing that time to do other activities like studying, taking a rest.

c) Buying a new car instead of keeping the old one.

The opportunity cost are saving the money so as to earn interest, purchasing assets like microwave, television, mobile phone.

d)  A local community voting to raise property taxes to increase school expenditures and to reduce class size.

The opportunity cost is reduction in the number of students and reduction in social welfare.

e) A number of countries working together to build a space station.

The opportunity cost is using the funds to begin other high value projects that have not yet been started in their respective countries.

f) Going to graduate school

The opportunity cost is spending the time to go to work somewhere and earn wages,using the money to be paid in school to satisfy basic wants like food, shelter and clothing.