Economic reasoning is based on the premise that O only economic decisions or actions have a cost associated with them. O only noneconomic decisions or actions have a cost associated with them. all decisions or actions have a cost associated with them. O all decisions or actions are costless.
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- QUESTION 2 The assertion that "there is no free lunch" means that: OA. there are always trade- offs between economic O B. all production involves the use of scarce resources and thus the sacrifice of alternative goods OC. marginal analysis is used in economic O D.choices need not be made if behavior is rational goals reasoningUsing marginal thinking, if you were deciding whether to purchase a second television set, you would compare Select one: a. the additional benefits of the second television with the cost of the second television. O b. the dollar cost of the two televisions with the time you will lose watching the two televisions. C. the total benefits expected from the two televisions with the cost of both televisions. O d. the additional benefits expected from a second television with the cost of the two televisions. O e. the dollar cost of the second television with the dollar cost of the first television.Suppose Alphonsos town raises the price of bus tickets from 0.50 to 1 and file price of burgers rises from 2 to 4. Why is file opportunity cost of bus tickets unchanged? Suppose Alphonsns weekly spending money increases from 10 to 20. How is his budget constraint affected from all three changes? Explain.
- Which of the following is one of the four economic principles of individual decision making? O Rational people make decisions based on average costs and benefits. O Rational people respond to incentives in predictable ways. The cost of something is the amount of money you pay to get it. O Both b and care correct. O a, b, and c are all correct.QUESTION 19 If one fails to account for implicit costs in decision making, then the cost-benefit rule will be flawed because, O A. the costs will be overstated O B. the costs will be understated C. the benefits will be overstated D. the benefits will be understated.1 explain the role of ceteris paribus in economic analysis
- The world in which we live is complex and to understand it, human beings make use of some orother simplification process. A theory can accordingly be seen as an attempt to simplify things.Such an observation may come as a surprise to those who have often heard remarks to the effectthat such and such a theory is difficult, or at the least terribly complicated. We should neverthelessremind ourselves that a theory involves an attempt to simplify things – it is the world out there thatis the complicated entity. A particular theory (or model) is merely trying to reduce it to manageableproportions, at least as far as understanding our environment is concerned.”In economics, theory is presented in a simple form by making the…1.23a) Post hoc assumptionb) Fallacy of compositionc) Ceteris paribus assumptiond) Blinkered approachIdentify the scarcity definition of economics from the following. a. None of these O b. ways to reduce wants to remove the problem of scarcity. O c. the choices we make because of shortage of resources. O d. the distribution of surplus goods to those in need.2. Below is a production possibilities frontier (PPF) for Happyland, acountry that produces only two goods- wine and cheese. wine cheese a) Explain what the production possibilities frontier is and how it illustrates scarcity. b) What happens to the marginal opportunity costof cheese production in Happyland as the country increases its cheese production? (increase, decrease, unchanged or indeterminate?) Explain how you can tell this from the PPFand why it happens. c) Briefly describe two specific policies the government of Happyland could undertake to shift out their PPF in future periods. (By specific policies, I mean something they can actually do to change productivity for either or both of these goods. "Increase resources," for example, is not a specific policy. What resources and what type of policy could increase the resources used for either of these products?)
- 3. Marginal analysis produces more optimal outcomes when working with scarce resources. How?You rent a car for $29.95. The first 100 miles are free, but each mile thereafter costs 10 cents. You plan to drive it 200 miles. What is the marginal cost of driving the car beyond the first 100 free miles? O The marginal cost is $10.00 plus the cost of gas. O The marginal cost is whatever can be purchased with $29.95 plus $10.00. O The marginal cost is $29.95. The marginal cost is the cost of gas plus the initial payment.Area of original paper 3.1.1 Complete the table above. lal paper change as htandia fokcs oto dsfterent laalves? wa the or th glain your anawer Describe he kind of relationahip between the ares of the original paper and the aumber of folds. 3.1.3 4. Mr Majola owns a shop where he repairs household appliances. He woulid like to buy a cell phone so that he can contact his customers after their work is done. Two different cell phone providers forwarded quotes to him upon request. Cell phone provider SAVE MORE quoted R80 per month and R2,50 per minute. Cell phone provider CASH IN quoted R100,00 per month and R2,00 per minute. Look at the incomplete table below: Airtime in minutes: t 10 20 30 40 50 60 SAVE MORE'S cost in rands: CM 80 105 130 155 Ass 380530 CASH IN'S cost in rands: Ca 120 140 160 240 340 460 100 4.1 What does the table above show? 4.2 Write down the symbol which represents the independent variable. 4.3 Where does the value 80 in row 2 come from? 4.4 Explain the situation if…