# Scenario 1 Suppose that you have a choice between going to the mov...

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1. Refer to Scenario 1 What is your opportunity cost of going to the movies? Discuss.
The opportunity cost of going to the movies is the earning foregone on the next best alternative which is working for \$10 per hour. Thus the opportunity cost of going to the movie is the earning foregone for two hours \$20.

2. Refer to Scenario 1 What is your opportunity cost of working? Discuss.
The opportunity cost of working is the enjoyment foregone by going to the movie with the friend which is the next best alternative. It could be even above \$20 or below \$20, as measurement of enjoying a movie is not given in the case (which would be the opportunity cost of working)

3. Melinda quits her job at a bank, which pays \$30,000 a year, to enroll in a two-year graduate program. Her annual school expenses are \$22,000 for tuition and fees and \$2,000 for books. What is her opportunity cost of attending the two-year graduate program?
The opportunity cost of Melinda attending the two year graduate program is the earnings foregone at the bank which would give her \$30000 per year for the two years she would be attending college and hence the opportunity cost is \$30000*2 = \$60000

4. Refer to Figure 2: The bowed outward shape of the production possibilities curve indicates that opportunity cost of apples in terms of sweaters is increasing for each and every unit of apple produced

5. Refer to Figure 2 Which point(s) on the graph is(are) efficient production possibilities?
R and U are efficient production possibilities as they lie on the PPF

6. Refer to Figure 2 Which point(s) on the graph is(are) unattainable given current resources and technology?
S and X are the unattainable points given...

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