Chapter 1: Limits, Alternatives, and Choices

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Chapter 1: Limits, Alternatives, and Choices
Study Questions
Questions 1 – 11
Student Name: Myranda Hobbs
Date: 07/13/2011
1. What we want will never come close to what we have. This means that in economics we have choices that must be made. 2. Society must sacrifice other goods and services to make the get one free, free to you. 3. Allocating a square block at the edge of a typical suburb would be the better choice. The opportunity cost would come from this choice because it would be better to put it into a suburb instead of in the Heart of New York City. Society obtains more of one thing and gives up the next best choice, which is in the Heart of New York City. 4. The term utility is someone’s pleasure, happiness, or satisfaction obtained from opportunities that the individual pursues. The term utility is related to purposeful behavior because consumers are purposeful in their decisions on what goods and services to buy. Therefore, buy being purposeful in their decision then they decide what opportunities to pursue to increase their utility. 5. The first decision in which I weighed marginal cost and marginal benefits is when I was thinking about opening my own tax preparation service. I had to think about what I needed versus what I wanted. I knew the startup costs would be a lot and knew that I needed to create a budget on what it would cost to do so. I realized that the costs out weighed the benefits right now in my life. The second decision was weather to get a new kitchen table. I realized that the costs there out weighed the benefits because I knew that I didn’t need to be spending the money to do so. The third was to buy a new car. My car is old and starting to have to have a lot of repairs. However, the repairs do not out weigh the benefits of owning a new car. I don’t have a car payment and that out weighs buying a new one. 6. A. Macroeconomics, B. Macroeconomics, C. Microeconomics, D. Macroeconomics, E. Microeconomics, F....
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