Principles of Economics Assignment Example | Topics and Well Written Essays - 1000 words - 7

Principles of Economics - Assignment Example This is because one will take more time looking for a parking space and the congestion in the parking area will create inconveniences. The opportunity cost is the cost of time taken to park that the students have to pay instead of engaging in other profitable activities. d) The opportunity cost of students with no employment is less than that of students with jobs earning 15 per hour. The students with no jobs are not forgoing any money as they take more time to park their cars as compared to before the price was lowered. To the contrary, those with jobs have to forgo the amount of cash they would have received if they worked those hours. b) The opportunity cost of 100 bats is 40 rackets that will be forgone if the country decides to add 100 bats more. Adding 100 bats will incorporate the resources that are usually used to produce the 40 rackets. The current resources can not be able to cater for the addition of 100 bats without decreasing the amount of rackets. Therefore, the rackets have to be produced less by 40. c) If the athletic country produces 300 bats and 300 rackets, the opportunity cost of additional 100 bats is 100 rackets. This is what is sacrificed to be able to produce the extra 100 bats. The resources will be reallocated to be used to produce the additional 100 bats. The resources have to be reallocated since they cannot cater for the additional bats. d) The additional production of 100 bats in part c will cause a greater trade off than the additional production of 100 bats in part b. This is because the opportunity cost increases as the goods produced increases. In b, 200 bats will be produced, while in c 400 bats will be produced. The gradient of the PPF becomes steeper as more bats are produced, showing a greater sacrifice in terms of rackets forgone. e) Suppose Athletic Country produces 200 bats and 200 rackets, 200