... AP1 Intro to Econ Fall NEW Version .pdf 1. Suppose you have $1000 to spend on shirts and sweaters. The price of a shirt is $45, and th price of a sweater is $15. a. The opportunity cost of buying 1 shirt = sweaters b. The opportunity cost of buying 1 sweater = shirts 2. You are currently taking an Accounting class and an Economics class. If you spend all your time reading only your Accounting textbook you can read 20 pages. If you spend all your time reading only your Economics textbook, you can read 80 pages. a. The opportunity cost of reading 1 Accounting page = Economics pages b. The opportunity cost of reading 1 Economics page = Accounting pages 3. The company that you manage has already spent $8 million on developing a new product - a website that combines You Tube, Twitter, and Facebook - called You Twit Face. The development is not quite finished. It will cost an extra $2 million to finish development and complete the product. Assume that this $2 million amount includes the explicit costs and any opportunity cost that the company may have. At a recent meeting, your salespeople report that the expected sales of your new product (if you finish) are $6 million total. If you do not finish developing the product you can sell the incomplete product to another company for $2 million. What is the MC of finishing the development? What is the MB of finishing the development? Should you finish the product? Why or why not? Use the idea of "thinking at the margin" to explain your answer. 10 888 Calendar To Do n Notifications