ECON 2030 Chapter : Lab Week 02 Kl1
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Topics: marginal cost vs. sunk cost, marginal bene t, production possibilities model, absolute advantage vs. Comparative advantage: specialization and mutual bene t from trade. Marginal bene t - the change in total bene t by adding one more unit. Marginal cost - the change in total cost by adding one more unit (= not counting sunk cost) Sunk cost - a monetary cost that has already been incurred regardless of the option chosen. The marginal cost of the third pair of shoes purchased is: sh, , , , , . Suppose a store sells pairs of shoes for each and is running a buy one, get one 50% o sale. Suppose further that you buy four pairs of shoes. The marginal cost of the fourth pair of shoes purchased is: sh, , , , , . Suppose a parking garage has the following pricing schedule:
