Thinking Like An Economist Quiz #1

You have three options for the last $5 in your pocket: a cappuccino you value at $7; a
smoothie you value at $9, and a frog. What is the (opportunity) cost of purchasing the
frog?

You have only $6 and you are currently planning on buying three coffees each at $2:
the first you value at $8, the second you value at $6 and the third you value at $4.
Prof. Gazzale then offers to sell you a frog for $4. What is the (opportunity) cost, in
dollars, of purchasing the frog?

You won a free ticket to see a Drake concert. The ticket normally sells for $100, but you
cannot sell yours. Arcade Fire is performing on the same night and is your next-best
alternative activity. While the price of a ticket to the Arcade Fire is $70, on any given
day, you would be willing to pay up to $140 to see Arcade Fire. Assume there are no
other costs of seeing either performer.

Your benefit from the first cup of coffee is $7, from the second cup of coffee is $6, and
from the third cup is $5. You can purchase as many cups of coffee as you like at $6.50
per cup. How many cups do you rationally buy?

Your total benefit of 1 cup of coffee is $6, total benefit of 2 cups of coffee is $11, and
total benefit of 3 cups of coffee is $15. You can purchase as many cups of coffee as you
like at $4.50 per cup. How many cups do you rationally buy?

You will knit for 8 hours today. In any particular hour, you can knit 0.75 hats or 0.25
scarves. What is the opportunity cost (in terms of hats you could have produced) of
increasing your scarf production from 1 to 2?

You will knit for 8 hours today. It takes you 20 minutes to knit a hat and 40 minutes to
knit a scarf. What is the opportunity cost (in terms of hats you could have produced) of
increasing your scarf production from 1 to 2?

If you do not use your $4 store credit today, it expires (i.e., becomes worthless)! You
can either use the credit to buy the $4 pour over, the $4 cortado or the let the credit
expire. If you value the pour over at $8, it is rational to use your credit for the cortado
as long as your cortado value is greater than (or equal to) what number?

If you do not use your $4 store credit today, it expires (i.e., becomes worthless)! You
can either use the credit to buy the $4 pour over, the $4 cortado or the let the credit
expire. If you value the cortado at $2, what is the opportunity cost of using your store
credit to buy a pour over?

This study source was downloaded by 100000803015368 from CourseHero.com on 09-18-2022 00:04:48 GMT -05:00

https://www.coursehero.com/file/16169420/Thinking-Like-An-Economist-Quiz/
Powered by TCPDF (www.tcpdf.org)