Date: 1/14/22LAB ASSIGNMENT 1This group exercise will help you connect the core principles of economics and the concept of gains from trade toreal world decisions.To successfully complete this assignment, you need to correctly apply economic concepts to answer thequestions.1) For the example below, explain how you would apply the four core principles of economics. Be specific andlist the cost and benefits, identify the opportunity cost, etc.If one principle doesn’t apply, explain why.Should you go to Carmichael Gymnasium on campus to work out today?Cost-Benefit Principle:➔ Costs:◆ The amount of time it takes to walk to the gym◆ the amount of time you actually spend in the gym takes time out of your schedule◆ If you are taking harder classes, you might have to allocate time from studying➔ Benefits:➔ good for your health➔ it is a free resource so no additional cost needs to be taken➔ great at relieving stress➔ builds strength and endurance➔ gives you a break from schoolOpportunity Cost Principle:Opportunity Cost Alternative:- Working out in your dormGoing to the gym is more effective than working out in your dorm due to the abundance of equipment and thediscipline present in the gym whereas the space and resources are limited in your dorm.Marginal Principle:- Marginal Costs:- The gym equipment you usually use is occupied, so you have to change your usual routine- You have to go back to your dorm and change into appropriate gym clothing.- Chance of contracting Covid because not everyone wears masks and cleans the equipment- Marginal Benefits:- You get to leave your dorm room- You get to reach your health and fitness goals- how many calories you will burnInterdependence Principle:- Gym isn’t open when you planned on going- Your friends made other plans and you want to join them- You worked out a few days ago and your body aches, and going to the gym might overwork your body.- the gym is crowded with limited equipment2) Identify a sunk cost associated with this decision and explain why it should NOT be considered as anopportunity cost.The sunken cost is the payment made for a membership for the Carmichael Gymnasium as it is included in ourtuition, and it is not an opportunity cost because it is not something that can be reversed or
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