Opportunity Cost

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1a.) Opportunity cost is best described by Pearson’s as, “The opportunity cost of any action is the value of what is given up-the next-highest-ranked alternative- because a choice was made” (Miller [30]). Before enrolling in this Economics course, I was unaware that there was an opportunity cost of every decision I make. Becoming aware of opportunity cost has rewired my way of thinking. If I want to go to Jiu-Jitsu, for example, I ask myself what is the cost of going tonight and is the best use of my time.
1b.) if I received free football tickets the opportunity cost of attending the game would be time. If I did n't get the free tickets, I would have spent my time doing other activities instead of going to the game.
1C.) if the dive time to …show more content…
From the top of the curve, the shape moves to the right for the opportunity cost forgone, and downward for the additional goods or services.
2b.) I would not choose point A on the graph because it represents a resource that is not used efficiently and there is not enough being produced to reach its potential in the market.
2c.) I would not choose X because it represents an output level that is unattainable in the economy based off of the graph. Not enough supply could be produced to meet the market demand for the goods or services.
3.) Microeconomics studies the decisions that individuals and businesses make and macroeconomics deals with the entire economy. Inflation is an issue that deals with the whole economy, making it a macroeconomic issue. When the price changes on individual products such as gasoline it is a microeconomic problem.
4a.) after completing the graph, I found that the equilibrium price is $3.60 and the equilibrium quantity was 400. I found this information on the chart where the demand and supply …show more content…
The reasons they are complementary goods to each other is because they are used together. For products to be considered a substitute, it would have to be a replacement. ii.) If the price of gasoline drops the demand for SUV’s and pick-up trucks would increase. The reason for the increase in demand is due to the consumes decision to purchase a less fuel-efficient vehicle while the price of fuel is low, even if the lower fuel prices is only temporary. iii.) According to the video provided for this exercise, incentives seem to be the determining factor for the projected record sales of an estimated $17.4 million in the auto sale for 2015. The incentives that would entice me to purchase an SUV or pick-up truck would include the December end of year close out specials, cash back incentives, cheap credit with low-interest rates, and lower fuel cost. I believe that all of these factors are the reason for the projected record sales in 2015.
10a.) Consumer surplus is the difference between what the consumers are willing to pay and the amount that they actually paid for the goods or
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