Answer to Question #299716 in Economics for hannah

Question

1.     Alicia has $60. She can choose to buy a new pair of jeans for $60, or a new pair of boots for $60.                10  Marks Total

a.     Which of the 10 economic concepts is Alicia dealing with? Explain. 2 Marks

Alicia is dealing with the concept of people facing trade-offs.

b.     If she chose to buy the boots because that would make her happy, is she being purposeful in her behaviour? Explain. 2 Marks  

c.     What is her money cost for the boots? 2 Marks

d.     According to the textbook, what is “opportunity costs”? 2 Marks

e.     What is Alicia’s opportunity cost in getting the boots? 2 Marks  

Answer 1

a. Alicia is dealing with the concept of people facing trade-offs.

b. If she chose to buy the boots because that would make her happy, then she is being purposeful in her behaviour.

c. Her money cost for the boots is $60.

d. According to the textbook, “opportunity costs” is the value of the next-best alternative when a decision is made; it's what is given up.

e. Alicia’s opportunity cost in getting the boots is a new pair of jeans which also costs $60.