Principles of Microeconomics 7th Edition solutions

Principles of Microeconomics 7
Describe some of the trade-offs faced by each of the following: a. a family deciding whether to buy a new car b. a member of Congress deciding how much to spend on national parks c. a company president deciding whether to open a new factory d. a professor deciding how much to prepare for classe.a rec

Principles of Microeconomics 7
You are trying to decide whether to take a vacation. Most of the costs of the vacation (airfare, hotel, and forgone wages) are measured in dollars, but the ben-efits of the vacation are psychological. How can you compare the benefits to the costs?

Principles of Microeconomics 7
You were planning to spend Saturday working at your part-time job, but a friend asks you to go skiing. What is the true cost of going skiing? Now suppose you had been planning to spend the day studying at the library. What is the cost of going skiing in this case? Explain.

Principles of Microeconomics 7
You win $100 in a basketball pool. You have a choice between spending the money now and putting it away for a year in a bank account that pays 5 percent interest. What is the opportunity cost of spending the $100 now?

Principles of Microeconomics 7
The company that you manage has invested $5 million in developing a new product, but the development is not quite finished. At a recent meeting, your sales-people report that the introduction of competing products has reduced the expected sales of your new product to $3 million. If it would cost $1 m

Principles of Microeconomics 7
The Social Security system provides income for people over age 65. If a recipient of Social Security decides to work and earn some income, the amount received in Social Security benefits is typically reduced. a.How does the provision of Social Security affect peoples incentive to save while working?

Principles of Microeconomics 7
A 1996 bill reforming the federal governments anti-poverty programs limited many welfare recipients to only two years of benefits. a.How does this change affect the incentives for working? b.How might this change represent a trade-off between equality and efficiency?

Principles of Microeconomics 7
Explain whether each of the following government activities is motivated by a concern about equality or a concern about efficiency. In the case of efficiency, discuss the type of market failure involved. a. regulating cable TV prices b. providing some poor people with vouchers that can be used to buy

Principles of Microeconomics 7
Discuss each of the following statements from the standpoints of equality and efficiency. a.Everyone in society should be guaranteed the best healthcare possible." b.When workers are laid off, they should be able to collect unemployment benefits until they find a new job.

Principles of Microeconomics 7
In what ways is your standard of living different from that of your parents or grandparents when they were your age? Why have these changes occurred?

Principles of Microeconomics 7
Suppose Americans decide to save more of their in-comes. If banks lend this extra saving to businesses, which use the funds to build new factories, how might this lead to faster growth in productivity? Who do you suppose benefits from the higher productivity? Is soci-ety getting a free lunch?

Principles of Microeconomics 7
During the Revolutionary War, the American colo-nies could not raise enough tax revenue to fully fund the war effort; to make up the difference, the colonies decided to print more money. Printing money to cover expenditures is sometimes referred to as an inflation tax. Who do you think is being taxed