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Exonomics: Important Issues

1. Define, in your own words, opportunity cost. What are your opportunity costs associated with attending Bethel's on-line program? How do they differ from your opportunity cost if you chose a program that required attendance in a traditional face-to-face classroom? Be sure to list several costs. The costs may be monetary or non-monetary.

2. Using the concepts of trade-offs, absolute advantage, and comparative advantage analyze the following questions:

Should Bill Gates clean his home or hire a housekeeper?

Should you clean your home or hire a housekeeper?

Is Mr. Gates' trade-off different from yours?

3. Discuss the following statement from the standpoint of TANSTAAFL: "Everyone in society should be guaranteed the best healthcare possible."

Use the concepts of equity and efficiency to support your argument.

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Solution Preview

1. Opportunity cost is the value of the next highest alternative use of resource. This alternative cannot be used if certain action is to be pursued. This is the benefits that could have been got by taking the alternative.
My opportunity costs associated with attending Bethel's on-line program are taking Phoenix's online program, George's online program, attending a face to face classroom, buying relevant books and self-study, or purchasing a bike with the money spent on the online program.
In case of a traditional face to face classroom, my opportunity costs are attending face to face classroom in another institution, attending an online program, self-study by purchasing books, doing a full-time job, or opening and operating a small business.

2. Trade-offs means achieving a ...

Solution Summary

The answer to this problem explains issues in economics. The references related to the answer are also included.