ECO111 Microeconomics

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Individual Assignment 01

Question 1. (5 points)

1. What is your opportunity cost of each of the following?

a. Attending your next economics class meeting.
b. Skipping your next economics class meeting.
c. Taking an all expenses paid trip to the Bahamas for a week during this semester.

2. The local pizza restaurant is advertising a special. If you buy one individual sized pizza,
you get the next one at 25% off, the third one for 50% off and the fourth one for 75% off.
Your marginal benefit from eating pizza is shown in the table below. If the price of a pizza
is $6, how many should you buy? (3 points)

No of pizzas MB (Marginal Benefit)

0 0
1 7
2 4
3 2
4 1

3. The workers in a factory currently earn $120 for a 39 – hour week. The management
offers them a choice between either a straight 10% wage increase or an increase in the
weekly wage to $125 coupled with a reduction in hours from 39 to 37 hours. What is the
opportunity cost to each worker of opting for the 37 – hour week? (2 points)