1. After graduating from high school, Ron Willis plans to go to college. The college tuition is $20,000 a year. But, instead of going to college, Ron could take a full-time job paying $25,000. If Ron decides to go to college, what is his opportunity cost for attending for one year?
2.Tammie makes $200 a day as a bank clerk. She takes off two days of work without pay to fly to another city to attend the concert of her favorite music group. The cost of transportation for the trip is $225. The cost of the concert ticket is $50. What is the opportunity cost of Tammie's trip to the concert?
3.The monthly productivity of two workers is as follow: Alex 300 Pants & 100 bikes and Joel 100 pants & 50 bikes.
a. Which one has an absolute advantage in the production of pants? bikes?
b. Which one has a comparative advantage in the production of pants? Bikes
c. Assuming that both Alex and Joel spend the whole year producing pants and / or bikes, find and graph the resulting combination of goods each worker can produce in a year.
d. Suppose that a pair of pants is sold for $ 30.00 and a bike for $100.00, how should they allocate their resources and time in production (assuming comparative advantage). Find their joint total revenue for the year.