Chapter 1 end of chapter key Thompson Rivers （第1章的章关键汤普森河流）.pdfVIP

Chapter 1 end of chapter key 1-1 What is an opportunity cost? How does the idea relate to the definition of economics? Which of the following decisions would entail the greatest opportunity cost: Allocating a square block in the heart of Toronto for a surface parking lot or allocating a square block at the edge of a typical suburb for such a lot? Explain. An opportunity cost is what was sacrificed to do or acquire something else. The condition of scarcity creates opportunity cost. If there was no scarcity, there would be no need to sacrifice one thing to acquire another. The opportunity cost would be much higher in Toronto as the alternative uses for that square block are much more valuable than for a typical suburban city block. 1-2 What is meant by the term “utility” and how does it relate to purposeful behaviour? “Utility” refers to the pleasure, happiness, or satisfaction gained from engaging in an activity (eating a meal, attending a ball game, etc.). It is an important component of purposeful behaviour because people will allocate their scarce time, energy, and money in an attempt to gain the most utility possible. 1-3 (Key Question) Cite three examples of recent decisions that you made in which you, at least implicitly, weighed marginal costs and marginal benefits. Student answers will vary, but may include the decision to come to class, to skip breakfast to get a few extra minutes of sleep, to attend college or university, or to make a purchase. Marginal benefits of attending class may include the acquisition of knowledge, participation in discussion, and better preparation for an upcoming