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Questions from Chapter 1

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Dear all,
Please ask me questions from chapter 1 in this section.
Thanks
David Lin


IP属地:浙江1楼2016-01-20 08:28回复
    please explain this in English, thanks.


    IP属地:浙江来自iPhone客户端5楼2016-01-23 16:31
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      Before I answer your question here, I'd like you to tell me what fixed costs are and what variable costs are. This topic here will be taught in out Microeconomics next term.


      IP属地:浙江来自iPhone客户端9楼2016-01-23 17:13
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        Opportunity Costs:
        In microeconomic theory, the opportunity cost of a choice is the value of the best alternative forgone, where a choice needs to be made between several mutually exclusive alternatives given limited resources. Assuming the best choice is made, it is the "cost" incurred by not enjoying the benefit that would be had by taking the second best choice available.
        Key Words, Value, Mutually exclusive.


        IP属地:浙江16楼2016-01-24 11:20
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          Example of Opportunity Cost
          Q: Suppose you have a free ticket to a concert by Band A. The ticket has no resale value. On the night of the concert your next-best alternative entertainment is a performance by Band B for which the tickets cost $40. You like Band B and would usually be willing to pay $50 for a ticket to see them. What is the opportunity cost of using your free ticket and seeing Band A?
          A: The benefit you forgo (that is, the value to you) is the benefit of seeing Band B. As well as the gross benefit of $50 for seeing Band B, you also forgo the actual $40 of cost, so the net benefit you forgo is $10. So, the opportunity cost of seeing Band A is $10.


          IP属地:浙江17楼2016-01-24 11:20
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            Capital
            For economists, capital includes all manufactured aids used in producing consumer goods and services. Included are all factory, storage, transportation, and distribution facilities, as well as tools and machinery.
            Capital used by economists refers no to money but to tools, machinery, and other productive equipment. Because money produces nothing, economists do not include it as an economic resource. Money is simply a means for purchasing goods and services, including capital goods.


            IP属地:浙江18楼2016-01-24 11:24
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              Tina has $5,000 to invest. She can invest the $5,000 in a certificate of deposit that earns 5% annually, for a first-year return of $250. Alternatively, she can pay off an auto loan on her car, which carries an interest rate of 7%. If she pays off the auto loan, she will save $350 (7% of $5,000) in interest expense.
              Question: What is Tina’s opportunity cost from investing in the certificate of deposit?


              IP属地:浙江26楼2016-01-27 12:40
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