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Calculate (a) Explicit Costs, (b) Implicit Costs, (c) Business Profit, (d)
Economic Profit, and (e) Normal Return on Investment.
Spreadsheet Problem: Using the data below, where column A
represents student numbers, column B the finishing time for a 1 mile
race for students, and column C the age of the students.
a) Use the data analysis tools to plot a line graph of all the finishing
times.
b) Calculate the mean, median, mode, sample variance, sample
standard deviation, and coefficient of variation to statistically describe
the data.
c) Use Excel to find the covariance between the two variables. What
does the covariance indicate about the relationship between finishing
time and age?
Froeb et al.’s Chapter 3:
a. Individual problems: 3-1 and 3-3.
Individual problem 3-1: You won a free ticket to see a Bruce
Springsteen concert (assume the ticket has no resale value). U2 has a
concert the same night, and this represents your next-best alternative
activity. The tickets to the U2 concert costs $80, and on any particular
day, you would be willing to pay up to $100 to see this band. Assume
that they are no additional costs of seeing either show. Based on the
information presented here, what is the opportunity cost of seeing
Bruce Springsteen?
Individual problem 3-3: Due to the housing bubble, many houses are
now selling for much less than their selling price just two or three
years ago. There is evidence that homeowners with virtually identical