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IEA Module 1 Assignment 1

This document contains a student's responses to an assignment with 4 questions: 1) A government policymaker cannot ignore economic theory as they must consider the economic impact of policies and not negatively affect the economy. 2) If the student left college, they would be less of a burden on parents but would not get a degree. The opportunity cost is not obtaining a college degree. 3) Buying a house that can be rented for profit is a good investment, and the opportunity cost of renting is losing investment opportunities. 4) A graph shows increasing total enrollment and economic course enrollment over years. The positive slope means economic course enrollment rises with total enrollment, and the line can predict future economic enrollment

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Mark Ace Sibi
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143 views2 pages

IEA Module 1 Assignment 1

This document contains a student's responses to an assignment with 4 questions: 1) A government policymaker cannot ignore economic theory as they must consider the economic impact of policies and not negatively affect the economy. 2) If the student left college, they would be less of a burden on parents but would not get a degree. The opportunity cost is not obtaining a college degree. 3) Buying a house that can be rented for profit is a good investment, and the opportunity cost of renting is losing investment opportunities. 4) A graph shows increasing total enrollment and economic course enrollment over years. The positive slope means economic course enrollment rises with total enrollment, and the line can predict future economic enrollment

Uploaded by

Mark Ace Sibi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Sibi, Mark Ace G.

02/16/2022
ASSIGNMENT 01 – MODULE 1
1. Explain why a government policy maker cannot afford to ignore economic
theory?
A government policy maker is to be held accountable for any benefits and
consequences their policy brings. Therefore, it is in their best interest to consider
economic theories as they do their jobs. This will make it so that they will not
negatively affect the country’s economy and instead help improve its state.
2. If you were to leave college, what things would change in your life? What, then, is
the opportunity cost of your education?
I would probably be less of a burden to my parents in the long run as I am confident
that I will be able to find a career through some of my hobbies given enough time
and support. However, I won’t get a degree for a while. Therefore, the opportunity
cost of me leaving college is the fact that I won’t get a college degree.
3. A person rents a house for which she pays the landlord $12,000 per year. The
house can be purchased for $100,000, and the tenant has this much money in a
bank account that pays 4% interest per year.

a. Is buying the house a good deal for the tenant?


Looking at the bigger picture, it is a good idea to buy the house. The value of
real estate is almost always increasing especially in a developing location. In
approximately nine years, the tenant should have made her money back as her
payment of $100,000 would instead be $108,000. Also, she could also have it
rented by another person for a slightly higher cost and earn her money back
that way.
b. Where does opportunity cost enter the picture?
In the situation I brought up, the tenant buys the house. In this case, the next
best alternative is not to buy the house and rent it instead. By buying the house,
she gave up the chance of just paying a net amount of around $8, for the year
as well as having money to invest on other opportunities.
4. Portray the following hypothetical data on a two-variable diagram:
Academic Year Total Enrolment Enrollment in Economic Courses
1994-1995 3,000 300
1995-1996 3,100 325
1996-1997 3,200 350
1997-1998 3,300 375
1998-1999 3,400 400
a. Measure the slope of the resulting line and explain what this number means

Enro llme nt in Eco no mic Co urse s VS To tal Enro llme nt


450
400
350
300 y = 25x + 275
250
200
150
100
50
0
3000 3100 3200 3300 3400

The slope of the line is 25 which is a positive number. This means that overtime,
as the number of total enrollees increase, the enrollment in economic courses also
increases. Furthermore, the equation of the line (y = 25x + 275) can be used to
predict the growth of the number of enrollees in economic courses as total
enrollment increases.

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