ECON 103 Lecture Notes - Lecture 1: Opportunity Cost

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rosebutterfly429

24 Feb 2016

School

Simon Fraser University

Department

Economics

Course

ECON 103

Professor

Junjie Liu

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Document Summary

If the choice is between going skiing and studying in the library, then the cost of skiing is equal to its monetary cost plus the value of time. If you have nothing to do, then the cost of going skiing equals its monetary cost. The baker produces the best bread possible, not out of kindness, but because it is in his best interest to do so. Market works only if property rights are enforced. A farmer won"t grow food if he expects his crops to be stolen. They may be confusing and may fail to focus on what is important. Students with a part-time job would be giving up more while looking for a parking place than those with no outside employment. Therefore, the cost of parking is higher for. Week 2: lisa buys a 1982 bmw for ,000, which she plans to restore and sell.

Related Questions

9. Problems and Applications

Q3 You were planning to spend Saturday working at your part-time job, but a friend asks you to go skiing. Which of the following are included in the true cost of going skiing? Check all that apply.

1.The rental of any ski equipment you need

2.The cost of a lift ticket

3.The cost of your ski jacket you purchased last year

4.The wages you forgo by going skiing

Now suppose you had been planning to spend the day studying at the library. What is the cost of going skiing in this case? Check all that apply.

1.The value of your time spent studying

2. The cost of a lift ticket

3. The rental of any ski equipment you need

4.The cost of your ski jacket you purchased last year

5.The wages you forgo by going skiing

roseweasel491

Suppose you deciding if you should spend your spring break in Florida this year. If you decide to go to Florida the price of airfare is $1,200, your hotel room for the week will is $400, and you'll spend $300 on food. If you decide not to take this vacation, you'll live in your parents' house at no cost to you except for $100 on food that week. Also, if you don't take this vacation, you'll work full time and earn $800 along with finishing your term paper. What would be your total opportunity cost of going to Florida? A. $2,600 plus the value of finishing your term paper B. $2,700 C. $800 D. $1,900 plus the value of finishing your term paper E. $700 plus the value of finishing your term paper

One often-used definition of the term opportunity cost is that it is something that is given up when a choice is made. An example would be the money from working full-time given up by going to school. I suggest using the definition that opportunity cost is in terms of the foregone benefits of the next best alternative that could have been chosen. If the choice is for going to school instead of working full-time, then the opportunity cost would be all the benefits you would enjoy from working full-time in addition to the income you would earn. Using examples from your experiences and what you know, in what manners does the suggested change in definitions offer advantages in evaluating potential outcomes of choices either you or society have to make? How does this second opportunity cost definition help you make better decisions?

ECON 103 Lecture Notes - Lecture 1: Opportunity Cost

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