Problem 1: "People who earn big salaries are less likely to go into business for themselves than people who earn small salaries because their implicit costs are higher" (Arnold, 2001). Do you agree or disagree? Explain your answer using real world examples or experiences.
Problem 2: People often believe that large firms in an industry have cost advantages over smaller firms in the same industry. For example, they might think a big retailer has a cost advantage over a small retailer. For this to be true, what condition must exist? Explain your answer using economic concepts and personal experiences.