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Chapter 2: Q 1 (page 42)
How must the dollar values of the opportunity costs of time compare for a typical purchaser of a vehicle converted by Becker Automotive, Inc., versus commuters who do not purchase them? Explain briefly.
Nearly billion.
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A nation’s residents can allocate their scarce resources either to producing consumer goods or to producing human capital—that is, providing themselves with training and education. The following table displays the production possibilities for this nation:
| Production Combination | Units of Consumer Goods | Units of Human Capital |
| A | 0 | 100 |
| B | 10 | 97 |
| C | 20 | 90 |
| D | 30 | 75 |
| E | 40 | 55 |
| F | 50 | 30 |
| G | 60 | 0 |
(a) Suppose that the nation’s residents currently produce combination A. What is the opportunity cost of increasing the production of consumption goods by 10 units? By 60 units?
(b) Does the law of increasing additional costs hold true for this nation? Why or why not?
What must be true of the trade-off perceived by people who have multiple sex partners?
Senator Borman interjects the following comment after the statements by Senators Creighton and Long reported in Problems 2-10 and 2-11: “In fact, both of my esteemed colleagues are wrong, because an unacceptably large portion of our nation’s resources is currently unemployed.” Of the labeled points on the diagram, which one is consistent with Senator Borman’s position?
Why might a person pay a firm at a mall to prepare her tax forms while she shops instead of allocating the same amount of time to finding a qualifying Free-File tax-preparation service?
Using only the concept of comparative advantage, evaluate this statement: “A professor with a Ph.D. in physics should never mow his or her own lawn, because this would fail to take into account the professor's comparative advantage."
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