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Opportunity costs, real cost, GDP, regulation, demand curve & subsidies

Boone and Kurtz Contemporary Marketing 12/e

Chapter 1 - from page 21
1. What opportunity costs did you incur in reading this chapter? If you read four more chapters of this text today, would your opportunity costs (per chapter) increase? Explain.

3. What is the real cost of the food in the free lunch cartoon?

6. Markets reward individuals according to their output; communism rewards people according to their needs.
How might these different systems affect work effort?

Chapter 2 - from page 43
2. Why is per capita GDP so much higher in the United States than in Mexico?

4. The U.S. farm population has shrunk by over 25 million people since 1900.
Were did they all go? Why did they move?

7. Why should the government regulate how goods are produced? Can regulation be excessive?

Chapter 3 - from page 68
1. In the story of Tom, the student confronted with a web design assignment, we emphasized the great urgency of his
desire for web services. Many people would say that Tom had an "absolute need" for web help and was therefore ready to "pay anything" to get it. If this were true, what shape would his demand curve have? Why isn't this realistic?

7. What would happen in the apple market if the government set a minimum price of $2.00 per apple? What might
motivate such a policy?

Chapter 4 - from page 91
1. Why should taxpayers subsidize public colleges and universities? What benefits are generated by higher
education?

9. Are subway fares progressive or regressive? How about highway tolls?

Solution Preview

1. What opportunity costs did you incur in reading this chapter? If you read four more chapters of this text today, would your opportunity costs (per chapter) increase? Explain.

Kindly think in the following terms: the opportunity cost that I incurred in reading this chapter was one hour of my time. I could have used to the time for doing my math assignment or alternately I could have done my finance problem. If I read four more chapters of this text today, the opportunity costs will increase very sharply. It is not a matter of another four hours of my time but the fact that the reading of this chapter will transgress on my other assignments and I will have to incur a penalty if I don't submit them before my deadline tomorrow.

3. What is the real cost of the food in the free lunch cartoon?

Please think of the following: the real cost of free lunch cartoon is borne by the person who eats the food. The cost is incurred in terms of the time the person has spent, the efforts that he has made and the after effects on his thought process that it may have. In effect the food in the free lunch carton is not free.

6. Markets reward individuals according to their output; communism rewards people according to their needs.
How might these different systems affect work effort?

Please consider the following: the market rewards individuals according to their output. This is a recommendation for private ownership and enterprise. In communist economies people are rewarded according to their needs. The rewards that the individual gets are based on the needs assessment and not on the basis of the output he produces.

This affects the work output because the worker who is not rewarded according ...

Solution Summary

In an 1165 word solution, the reponse presents a clear and comprehensive discussion for each question.

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