ECN 203 Lecture Notes - Lecture 18: Marginal Product
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What is opportunity cost and how does it follow from the fundamental concept above. Give an example of a decision you"ve made in the past and the opportunity cost of your decision: fill in the blanks below and answer the question to follow. Briefly explain: sarah spends her spare time reading, watching television and exercising. For the first unit of time spent on any of these activities, sarah likes reading the most, but she tires quickly while reading. Sarah enjoys watching television more than she likes exercising, and unlike her other two activities, she can watch television for long periods of time. Sarah enjoys exercise the least of all her activities and tires very quickly while exercising. However, sarah will exercise if she has the time. Sketch three diagrams (side-by-side) representing the marginal utility sarah receives for each unit of time spent on her three activities. Briefly explain your diagrams: coco produces hats.
