5. How does Mr. Lopez’s not accepting a “free” weekend in Vegas illustrate that nothing is free?

6. Why are rich people less likely to smoke What does it cost to smoke? Assume two people have the same level of addiction to cigarettes They both smoke 1 pack a day at a cost of $5 per pack, $1825 per year

7. Compare these two guys The first guy makes $260,000 per year or $5,000 per week The second guy works at a construction site and earns $26,000 per year or $500 per week

8. The cost of the cigarettes Assume two people have the same level of addiction to cigarettes They both smoke 1 pack a day at a cost of $5 per pack, 365 packs at $5 each is $1,825.00 Is this the only cost?

9. And they are each sick 1 week per year due to their smoking The business man's week is worth $5,000 while the second man's is worth $500. Which of these two guys has the higher opportunity cost? Is that it?

10. Additional Opportunity Cost Smoking significantly increases the chances of dying from cancer. If the first guy dies 3 years earlier what is the cost? $780,000 If the second guy dies 3 years early...$78,000

11. The math The Construction guy...... Cost of cigarettes $1825 per year Cost of being sick just one add'l week $500.00 Cost of dying 3 years early $78,000 Total $80,350

12. The business man Cost of cigarettes $1825 per year Cost of being sick just one add'l week $5,000 Cost of dying 3 years early $780,000 Total:$786,250!!!

13. The smoking addiction Smoking is very addictive and it has a high opportunity cost.

14. Don't start Americans spend billions trying to break their addiction to smoking Frequently they became addicted at a young age.

16. Opportunity cost and family size Why are Hispanics in US and Muslims in Europe have higher birthrates?

17. The Bachelor and The Bachelorette Each show starts with 25 trade-offs By the last week it is down to just two choices, why?

19. Opportunity costs and Probability

20. What is the difference between possibility and probability?

21. Why should we be more concerned about probabilities? Does this mean Lopez should not get a tux to wear for taking Shakier out?

22. Scarce resources What is the basic economic truth? What is a “better” use of scarce resources? Inoculating children against cholera in the third world or preparing to defend the earth from invaders from Mars? Why?

23. Airline safety

24. Write these proposals down Smoke detectors in cargo and passenger areas $1.6 Billion or $1.89 per ticket Fuel tank safeguards $10 billion or $11.76 per ticket Tougher engines to protect against birds $6.4 billion or $7.50 per ticket Wing deicers $98 million or 12cents per ticket Upgraded radar $4.8 billion or $5.65 per ticket Better flight recorders $325 million or 38 cents per ticket New machines to inspect luggage $26.5 billion or $31 per ticket Better ground warning devices $300 million or 35 cents per ticket

25. Airplane Safety There are certain risks or potential dangers passengers face when they fly in airplanes How can these risks be reduced?

26. Smoke detectors in cargo and passenger areas You do not want to find yourself 30,000 feet above ground.. An hour from the nearest airport And the plane on fire!!!

27. Can birds bring down a plane? In 2007, 7,439 planes in flight were struck by birds (4,832 in NYC and 7,842 in California)

29. “Look at the nice birds”

30. Fuel tank safeguards TWA Flight 800 exploded off the coast of Long Island Fumes in a duel tank exploded and blew off the front third of the plane

31. Everyone on the plane died A memorial was built to them on a beach on Long Island were some of the remains and plane parts washed ashore

32. Better plane deicing

33. Better Radar

34. Flight Records After accidents the recorders are recovered and check for information on why everyone is now dead

35. Better Xray equipment Should every bag be checked before it goes onto a plane? Would you be willing to pay the extra fee?

36. Weighing Options What are two important economic considerations in determining which of these proposals to adopt? (Question 16) Possibility versus Probability

37. Since 9-11 Since the events of 9-11 there is a change is what Americans now perceive as probability.

38. For example… Someone seizing a plane to fly into a building. Some one carrying explosives in their shoes or underwear Someone trying to shoot a plane down with a missile

39. As a result… Can you bring liquids on planes? Can you wear your shoes going through security? Are they “questioning” passengers and inspecting more luggage?

40. Invasive Why have people started complaining about airport security?

43. Probability versus Possibility What is the probability that this passenger plans to blow up the plane? Does this procedure make us any safer? Yes and No. In this case probably not but in another situation? Is it “worth” the “cost”?

44. Again… What about in these cases? Is it possible these children are carrying bombs for their terrorist parents? When was the last time a terrorist brought their child along to die with them? Is this a wise use of scarce resources? It depends.

45. Public reaction…

46. Is it “worth” the cost?