Economics and Essential Work Equipment

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CHAPTER 1
 
a. Short-term financial stress vs long-term increased potential productivity

b. Risk of textbook needing replacement anyway and increased time spent using it if it is worn/hard to read/must be treated carefully vs price

1a. Essential work equipment (also company vehicle, so may/may not have increased mobility leading to reduced transport costs and better access to better/cheaper services); also maintenance

b. As above, except it might be more peripheral as people won't decide whether to use the company based on what kind/condition it is in; also won't need maintenance

c. Service that will insure against potential losses (if the counsel prevents you doing something illegal) /provide an income stream (if s/he tells you about a tax loophole) / damage control (if someone sues)

d. Rental property that will generate income with management

3- (Micro versus Macro) Determine whether each of the following is primarily a microeconomic or a macroeconomic issue:

a. What price to charge for an automobile: Macroeconomics
b. Measuring the impact of tax policies on total consumer spending in the economy: Macroeconomics c. A household’s decisions about what to buy: Microeconomics d. A worker’s decision regarding how much to work each week: Microeconomics  

CHAPTER 2

4 (Opportunity Cost) You can either spend Spring Break working at home for $80 per day for five days or go to Florida for the week. If you stay home, your expenses will total about $100. If you go to Florida, the airfare, hotel, food and miscellaneous expenses will total about $700. What’s your opportunity cost of going to Florida? (Hint: Answers may vary)

$80x5=$400-$100=$300profit
trip to Floirda=$700 expense= -$700
if you stay you make $300 IF you go costs $700+the $300 you would have made if you stay therefore the cost is $300 + $700=$1000

5. a. PPF shifts in because the labor supply is less (assuming the vacations happen outside of the country!) b. PPF...
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