Seminar 1

By Le Thanh Ha
Type I: True/False question (give a brief explanation)
1. Scarcity means that there is less of a good or resource available than people wish to
have.
Ans: True. Must bla bla…
2. Economics is the study of how evenly goods and services are distributed within society.
Ans: True
3. The cost of an action is measured in terms of foregone opportunities.
Ans: True
4. Tuition is the single-largest cost of attending college for most students.
Ans:
Ans: False there may exist other costs (implicit costs- foregone opportunities.) that are
larger than tuition.

5. If wages for bankers increase, then bankers’ leisure time would have a lower
opportunity cost.
Ans: False
Bankers (or any individual) face the tradeoff the working and leisure. The costs of leisure is
the money that they earn from working. An additional hour of taking a nap, the less time
bankers can work The opportunity costs of leisure time become more expensive.

6. If a firm considers whether they should expand the business. At that point of time, the
marginal revenue from selling more products to market is higher than the marginal cost,
thus firm should expand their business.
Ans:
MR>MC firms should produce more to get a higher level of profit.

Type II: Discussion questions

Question 1: How does the study of economics depend upon the phenomenon of scarcity?
Question 2: Describe a business plan that you want to do at present (a plan that you must
spend whole time on)? Let talk in detail about resources (labor, materials…) you need for
the business plan, and how you are going to use them in an efficient way.
From that what is your opportunity cost to be student?
What was your opportunity cost of coming to class today?
Question 3:
Case A: you are living in Haiphong and you have to pay 1M for a rent and living. You
decide to go to Hanoi to study at NEU. You have to pay 1.5M for a rent and living to
survive in Hanoi. You also have to pay tuition fee: 2M. What are the opportunity cost for
studying in Hanoi?
Ans EC=2M ,1,5M-1M=0.5; OC = 2+0,5M=2,5M:

Case B: You have a free ticket to Buc Tuong concert. At the same day, the Ngũ Cung also
have their performance and this is the best choice for you. You are willing to pay 500k for
Ngũ Cung concert but the price that you actually pay is 400k. Assume that there is no other
cost. What is the opportunity cost to see the Bức Tường concert?
EC=0
IC=100k
OC=100k

Question 4: Imagine a society produces two goods: clothes and food as you can see from
the picture below. Answer the following questions:
1. How we call this curve? Use the concept of oppurtunity cost to explain the shape of
the curve?
2. Can you explain differences between point A, B, and C.
 3. Suppose that the economy experiences a drought. Let explain impacts of this event
on the curve?
Ans:
Suppose that the economy experiences a drought. Let explain impacts of this event on the
curve?
3-step analysis:
 Step 1: a drought only affects the productivity of food.
 Step 2: it is a negative effect.
 Step 3: Simulation

Conclusion: The effects of a drought are shown below. The drought reduces the amount of
food that can be produced, shifting the production possibilities frontier inward.
Question 5:
Một nền kinh tế giản đơn sản xuất 2 loại hàng hóa là bắp cải và khoai tây. Nền kinh tế đó
bao gồm 3 khu vực địa lý: KV1, KV2 và KV3. Giả sử rằng cả 3 khu vực sử dụng tối ưu tất
cả các nguồn lực. Cả khả năng có thể đạt được của 3 khu vực như trong bảng.
Từ các đường giới hạn khả năng sản xuất trên hãy xác định đường giới hạn khả năng sản
xuất của toàn bộ nền kinh tế.

Khu vực 1

Bắp cải Khoai tây

A 200 0

B 100 50

C 0 100

Khu vực 2

Bắp cải Khoai tây

A 100 0

B 50 50

C 0 100

Khu vực 3

Bắp cải Khoai tây

A 50 0

B 25 50

C 0 100
Type III: Multiple Choice
1. Economics deals primarily with the concept of
a. scarcity.
b. money.
c. poverty.
d. banking.
2. The adage, "There is no such thing as a free lunch," means
a. even people on welfare have to pay for food.
b. the cost of living is always increasing.
c. people face tradeoffs.
d. all costs are included in the price of a product.

3. For a college student who wishes to calculate the true costs of going to college, the
costs of room and board
a. should be counted in full, regardless of the costs of eating and sleeping elsewhere.
b. should be counted only to the extent that they are more expensive at college than
elsewhere.
c. usually exceed the opportunity cost of going to college.
d. plus the cost of tuition, equals the opportunity cost of going to college.
4. Suppose after graduating from college you get a job working at a bank earning
20miliions VND per year. After two years of working at the bank earning the same
salary, you have an opportunity to enroll in a one-year graduate program that would
require you to quit your job at the bank. Which of the following should not be
included in a calculation of your opportunity cost?
a. the cost of tuition and books to attend the graduate program
b. the 20miliions VND salary that you could have earned if you retained your job at
the bank
c. the 45miliions VND salary that you will be able to earn after having completed
your graduate program
d. the value of insurance coverage and other employee benefits you would have
received if you retained your job at the bank.

5. When calculating the cost of college, which of the following should you probably
not include?
a. The cost of tuition
b. The cost of books required for college classes
c. The income you would have earned had you not gone to college
d. The cost of rent for your off-campus apartment.