Solution Manual For Microeconomics and Behavior, 10th Edition Robert Frank
Chapter(1-18)
Part 1: Introduction (Chapters 1-2)
Chapter 1: Thinking Like an Economist
Q1: According to the cost-benefit approach in Chapter 1, if the marginal benefit of
an action is
50
a
n
d
t
h
e
m
,a
r
g
i
n
a
l
c
o
s
t
i
s
50andthemarginalcostis40, you should:
a) Not take the action because costs matter
b) Take the action only if there are no sunk costs
c) Take the action because the net benefit is positive
d) Not take the action because the cost is too high
,Answer: c) Take the action because the net benefit is positive
Rationale: The cost-benefit approach says to take an action if the marginal benefit
exceeds the marginal cost. Here,
50
−
50−40 = $10 positive net benefit, so the action is worthwhile .
Q2: The opportunity cost of going to college includes:
a) Tuition and books only
b) The wages you could have earned by working instead
c) Room and board expenses
d) Only explicit financial costs
Answer: b) The wages you could have earned by working instead
Rationale: Opportunity cost includes the value of the next best alternative. For a
college student, this is often the foregone wages from a full-time job.
Q3: An "Economic Naturalist" as described by Frank is someone who:
a) Only studies environmental economics
b) Applies economic principles to everyday situations
, c) Avoids using marginal analysis
d) Relies solely on intuition
Answer: b) Applies economic principles to everyday situations
Rationale: Frank encourages students to become Economic Naturalists by using
basic economic tools (like marginal analysis) to explain everyday observations and
ordinary details of life .
Q4: Sunk costs are:
a) Costs that vary with the decision
b) Future costs that can be avoided
c) Costs that have already been incurred and cannot be recovered
d) The primary determinant of rational choice
Answer: c) Costs that have already been incurred and cannot be recovered
Rationale: Rational decision-making ignores sunk costs because they are
unrecoverable and should not influence future marginal decisions.
Q5: Suppose you bought a non-refundable movie ticket for
15.
Chapter(1-18)
Part 1: Introduction (Chapters 1-2)
Chapter 1: Thinking Like an Economist
Q1: According to the cost-benefit approach in Chapter 1, if the marginal benefit of
an action is
50
a
n
d
t
h
e
m
,a
r
g
i
n
a
l
c
o
s
t
i
s
50andthemarginalcostis40, you should:
a) Not take the action because costs matter
b) Take the action only if there are no sunk costs
c) Take the action because the net benefit is positive
d) Not take the action because the cost is too high
,Answer: c) Take the action because the net benefit is positive
Rationale: The cost-benefit approach says to take an action if the marginal benefit
exceeds the marginal cost. Here,
50
−
50−40 = $10 positive net benefit, so the action is worthwhile .
Q2: The opportunity cost of going to college includes:
a) Tuition and books only
b) The wages you could have earned by working instead
c) Room and board expenses
d) Only explicit financial costs
Answer: b) The wages you could have earned by working instead
Rationale: Opportunity cost includes the value of the next best alternative. For a
college student, this is often the foregone wages from a full-time job.
Q3: An "Economic Naturalist" as described by Frank is someone who:
a) Only studies environmental economics
b) Applies economic principles to everyday situations
, c) Avoids using marginal analysis
d) Relies solely on intuition
Answer: b) Applies economic principles to everyday situations
Rationale: Frank encourages students to become Economic Naturalists by using
basic economic tools (like marginal analysis) to explain everyday observations and
ordinary details of life .
Q4: Sunk costs are:
a) Costs that vary with the decision
b) Future costs that can be avoided
c) Costs that have already been incurred and cannot be recovered
d) The primary determinant of rational choice
Answer: c) Costs that have already been incurred and cannot be recovered
Rationale: Rational decision-making ignores sunk costs because they are
unrecoverable and should not influence future marginal decisions.
Q5: Suppose you bought a non-refundable movie ticket for
15.
