Author Question: Explain why it is more likely that the opportunity cost of attending a 7:00 a.m. class is forgone ... (Read 93 times)

anshika · **on:** Jun 29, 2018

Explain why it is more likely that the opportunity cost of attending a 7:00 a.m. class is forgone sleep but that this is not reasonably likely to be the case for a class that meets at 12:00 noon.

What will be an ideal response?

Question 2

The average total cost curve is U-shaped. At the quantity of output where average total cost is at its minimum, is the marginal cost curve above the average total cost curve, below the average total cost curve,

or intersecting the average total cost curve?

cswans24 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

At 7:00 a.m. there might not be too many other opportunity costs for your time. Forgone sleep might reasonably be an opportunity cost of your time. However, at 12:00 noon while it is possible that forgone sleep is your opportunity cost it is not likely since there are probably other things of higher value that you have given up by then unless you are a very late sleeper.

Answer to Question 2

When the average total cost is at its minimum, the average total cost equals the marginal cost. Therefore at the quantity of output where the average total cost is at its minimum, the marginal cost curve intersects the average total cost curve.