Solution Manual For Microeconomics 3CE Dean S. Karlan, Jonathan J. Morduch, Rafat Alam, Andrew Wong Chapter 1-21 With Appendix [A B C D E F]
CHAPTER 1 ECONOMICS AND LIFE Solutions to End-of-Chapter Questions Review Questions 1. Suppose you are shopping for new clothes to wear to job interviews, but you’re on a tight budget. In this situation, what are your wants and constraints? What does it mean to behave rationally in the face of scarcity? [LO 1.1] Answer: If you are deciding what to buy for a job interview, your want is to buy clothing that looks clean and professional, so you can present the best possible impression to potential employers. Your constraint is the amount of money you can spend on this clothing. A person behaving rationally would buy the nicest clothes they could afford. 2. You are a student with a demanding schedule of classes. You also work part-time and your supervisor allows you to determine your schedule. In this situation, what is your scarce resource? How do you decide how many hours to work? [LO 1.1] Answer: Your scarce resource is time. You need both time to study and time to work. Presumably, you want to do well in school and also make money. You will try to balance your schedule so that you work as much as possible while still having enough time to study and do well in school. 3. Think about the definition of scarcity that you learned in this chapter. Name three ways that you confront scarcity in your own life. [LO 1.1] Answer: We face scarcity in many aspects of our lives. I love to travel and explore new places. I face scarcity in both time and money that keeps me from traveling as often as I would like. In my professional life, I also face scarcity. There are lots of worthy projects I would like my department to take on, but I am limited in my available resources of employees, time, and budget. Collectively, as a society, we want more camping sites in the summer months. But there are limited number of sites available. 4. When shopping for your interview clothes, what are some trade-offs you face? What is the opportunity cost of buying new clothes? What are the benefits? How do you balance the two? [LO 1.2] Answer: One trade-off is that the money you spend on clothes for a job interview could be spent on other things instead. One opportunity cost of buying new clothes is other things forgone. Another opportunity cost is the time you spend shopping, which could be spent preparing for your interview Karlan Microeconomics 3CE Solution’s Manual: Chapter 1 Copyright © 2023 McGraw Hill. All rights reserved. 1-1