You have 40,000 frequent flier miles. You could exchange your ...

[urbanoutfitters]

You have 40,000 frequent flier miles. You could exchange your miles for a round trip ticket to Bermuda over spring break. Does that mean your flight to Bermuda would be free? Explain your reasoning.
 
  What will be an ideal response?

Question 2

Equilibrium in a competitive market results in the greatest amount of economic surplus from the production of a good or service.
 
  Indicate whether the statement is true or false

[stano32]

Answer to Question 1

It does not. You could use your miles for other travel and so there is an opportunity cost if you use your miles to fly to Bermuda. Suppose, for example, you are definitely going to fly to Chicago when the spring semester is over. You could use your 40,000 miles to fly to Chicago or you could purchase a ticket for 300 . In this case, the opportunity cost of using your miles to fly to Bermuda is the 300 you will have to spend for the airfare to Chicago.

Answer to Question 2

TRUE

[urbanoutfitters]

Thank you

[stano32]

Happy to help you