Question

1. Use the concept of Opportunity Cost to explain the following

Answer 1

The correct answer is, the explanation using the opportunity cost is the following.

First, the opportunity cost is the benefits a person lose when it makes a decision of one thing over the other when the person has different alternatives.

This being the case:

a) more people choose to get graduate degrees when the job market is poor. The cost of opportunity, in this case is, that people do not get a job because maybe is not an attractive one or is paid low, but they prefer to get a degree or take courses for their continual education.

b) More people choose to do its own home repairs when the economy is slow and hourly wages are down. This way people can save some money doing their own home reparations instead of paying the service, but the quality of the work is at risk because it is not done by an expert that is qualified to do the job.

c) There are more parks in suburban than in urban areas. There are more people in urban areas that can go to the parks, but the places are going to be more crowded. The parks in the suburban areas are far away but there is going to be fewer people, more space and probably in better conditions.

d)  Fewer students enroll in classes that start before 10:00 AM. They prefer to sleep more time instead of waking up earlier, but the problem is that they are going to have less time to do their activities. They probably are going to be in a rush.