Answer Happy

4. Mr. Busy has just enough time in which to complete any one of the following tasks; vacuum his apartment, write a letter to his mother, and buy groceries. The dollar values that Mr. Busy places on these individual tasks are, respectively; $26, $31, and $29. What is Mr. Busy's rational choice and what is its opportunity cost? (a) Buy groceries, $57. (b) Write to his mother, $55. (c) Vacuum his apartment, $60. (d) Buy groceries, $26. (e) None of the above. 5. An economics professor who lives in Buffalo can teach either at UB or at UR (University of Rochester), but not both. If she teaches at UB, then she will be paid $18,000 for the course. If she teaches at UR, then she will be paid $21,000 for the course. Teaching at UB requires the professor to pay a union due of $1,200. UR does not impose a union due, but the total cost of commuting between Buffalo and Rochester for the entire course is $2,900. What is the professor's economic profit? (a) $1,300. (b) $1,700. (c) $16,800. (d) $16,900. (e) $18,100. 6. Two countries, A and B, trade freely with each other. Country A exports cars to country B and imports gasoline from country B. Country B exports gasoline to country A and imports cars from country A. Country A can produce at most 400 cars or at most 2,000 gallons of gasoline. Country B can produce at most 500 cars or at most 3,000 gallons of gasoline. For trade to benefit both countries, the terms-of-trade t must lie between (a) 1/5 cars/gallon and 6 cars/gallon. (b) 5 gallons/car and 1/6 gallons/car. (c) Both (a) and (b).