Micro1 Essay Example | Topics and Well Written Essays - 1000 words

Micro1 - Essay Example The cost is nil as well for attendees whose higher degree provides upward revision of earnings. The components of opportunity cost include fees paid for tuition purposes, foregone earnings, book prices, leisure time. The percentage of opportunity cost and the money value is closely correlated. Tuition fees of colleges can be treated as the greatest cost of attending college. Answer 2 Decisions taken at the margin are one of the key factors in decision making processes. The marginal cost accrued to a decision is taken into account by the decision maker at the margin. The decision maker judges whether the cost is greater than the benefit when the decision will take effect. An example is as follows: an employer judges the additional cost of recruiting an extra employee with the benefit the organization gains from recruiting that additional person. If it is analysed that benefit exceeds the salary, then the employer decides to recruit the person. Average cost is used while determining de cisions on investments and tax. Answer 3 The statement is as follows: â€Å"HSBC in Talks on Possible Sale of Ping An Stake†. The statement is a positive statement as it can be accepted or rejected depending on the available evidences (The Wall Street Journal, 2012a). The statement is as follows: â€Å"Sahara Feeling heat over bond sales†. ... The statement is a positive statement as it can be accepted or rejected depending on the available evidences (The Wall Street Journal, 2012d). Answer 4 The scenario under assumption is seamstress decides to produce more dresses in an hour than the seamstress usually does. The incentive behind such action of the seamstress can be listed as follows: 1) Subsidy on dress prices from the part of the government; 2) Fall in price of raw materials; 3) Reduction in transport prices necessary for supply of goods to the market; 4) Rise in demand conditions; 5) Possibilities of exports opening up. There may also be some disincentives like fall in the export possibilities of the goods, uncertainty getting accrued to the production process, and sudden fall in demand expectations. The scenarios based on political, legal or cultural aspects are unavoidable. Answer 5 It is assumed that the farmer uses the available land in efficient fashion. The following diagram denotes the total amount of corn and beans he can produce. The farmer has the luxury to produce 150 units of beans if he chooses not to produce any corn. On the other hand, he can produce 300 units of corn if he chooses not to produce any beans. In economics, such an action is defined as efficient use of resources. The opportunity cost of corn at each level of production is 25 units of beans. The marginal cost of the farmer at each level of production is the cost of 25 units of beans. The slope of the line is 25. The slope of the line is same as the marginal cost. Answer 6 The costs of producing corn and beans are needed to determine the level at which the farmer should produce. Answer 7 Answer 8 The skills that have been taken under consideration to be compared are