Defining opportunity cost in economic terms

Defining opportunity cost in economic terms

Instructions/Descriptions

Defining opportunity cost in economic terms

Unit 1 [BU224 Assignment Template]

Unit 1 Assignment: Opportunity Costs

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3. Insertyour answers below, or in the appropriate space provided for in the question. Your answers should follow APA 6th edition format with citations to your sources and, at the bottom of your last page, a list of references. Your answers should also be in Standard English with correct spelling, punctuation, grammar, and style double-spaced, in Times New Roman, in 12–point, and black font). Respond to questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions.
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Assignment:

In this Assignment, you will demonstrate your understanding of certain economic principles that underlie virtually all decisions that people make. Specifically, the concept of Opportunity Costs by selecting the correct underlying principle and explaining in a series of logical steps which would likely produce the results described.

Questions

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1. Howard needs to buy a laptop computer to start online university courses. The price at the local computer store is $650. The identical computer is available at one online site for $605 and another site, for $622. All prices include the appropriate sales tax. The accompanying table indicates the typical shipping and handling charges for the computer ordered online.

1. Define “opportunity cost” in economic terms. (3 points)
2. In this situation, what are the opportunity costs of Howard choosing to buy online instead of at the local computer store? Note that if you buy the computer online, you must wait to get it. (4 points)
3. List all the possible choices for Howard, including their relevant differences in price and delivery time. (4 points)
4. What determines which of these choices Howard will choose? (3 points)
5. During the improving economic conditions of 2015 and early 2016 much additional construction of homes and condos throughout much of the U.S. took place. This provided a significant increase in the income of workers in the construction trades. Many of the construction workers were immigrants and have family and relatives in other countries. Often these workers would send part of their income to their less fortunate relatives in their old country, especially in Mexico and some of the South American countries.
6. Which of the economic principles best describes this situation? (4 points)
7. Using the principle you have selected, describe the chain of events that best explains how the increased money sent to families in these South American countries will cycle through the economy of that country and what overall affect it will have within the economy. (5 points)
8. From June 2008 oil was at a high of $144.78 per barrel. During the period from April 2011 until July of 2014, the price of oil hovered between about $115.32 per barrel and about $105.22 a barrel. Then, starting in August 2014 oil began a precipitous fall in price from the $105.22 to $33.62 a barrel in January 2016. Although the U.S. has great amounts of oil that can be brought out of the ground by “fracking,” by the beginning of 2016 many of the workers in the U.S. oil exploration and drilling industry were out of work and tremendous amounts of oil exploration equipment was sitting in the equivalent of “used car lots” to be sold.
9. Which of the economic principles best describes this situation? (4 points)
10. Using the principle you have selected, describe the chain of links that best explains how the falling international oil prices caused U. S. workers to be laid off and available U.S. oil to be left in the ground. (5 points)

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References:

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Defining opportunity cost in economic terms

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