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Why doesn't FedEx buy more trucks and hire more drivers? What incentive problems might arise from this arrangement?
Lee is a computer programmer who earned $35,000 in 2011. Calculate Lee's opportunity cost of production and his economic profit.
Lee's accountant recorded the depreciation on his cottage during 2012 as $7,000. According to the accountant, what profit did Lee make?
In spite of what Chrysler's vice chairman and co-president claims, why is Chrysler's focus actually on profitability?
What is the cost of buying a watch? What is the opportunity cost of owning a watch? Does owning a watch create an economic profit opportunity?
Four methods of completing a tax return and the time taken by each method are with a PC, 1 hour. Which, if any, of the methods is technologically efficient?
Which method is economically efficient if the wage rate is (i) $5 an hour, (ii) $50 an hour, and (iii) $500 an hour?
What additional information would you need to be able to say that switching to surgical robots is economically efficient for a hospital?
How does Loblaw coordinate its activities? Is it likely to use mainly a command system or also incentive systems? Explain.
Describe the roles of market coordination and coordination by firms in the design, manufacture, and marketing of the Xbox 360.
Why do you think the Xbox is designed in the United States and Japan but built in China?
What products do Facebook and Google sell? In what types of markets do Facebook and Google compete?
Explain how the marginal product and average product of labour change as the labour employed increases (a) initially and (b) eventually.
What is the law of diminishing returns? Why does marginal product eventually diminish?
What does the news clip imply about the principle of diminishing marginal rate of substitution? Is that implication likely to be correct?
Gas Prices Straining Budgets With gas prices rising. How does a rise in the price of gasoline change the relative price of a restaurant meal?
Sketch a budget line for a household that spends its income on only two goods: gasoline and restaurant meals.
If the price of cake doubles while the price of coffee remains at $4 a cup and Amy's income remains at $20, describe the change in her budget line.
If Amy's income increases to $24 a week and the prices of coffee and cake remain unchanged, describe the change in her budget line.
Amy has $20 a week to spend on coffee and cake. Calculate Amy's real income in terms of cake. Calculate the relative price of cake in terms of coffee.
Draw a graph of Marc's budget line with the quantity of DVDs on the x -axis. What is the slope of Marc's budget line? What determines its value?
Marc has a budget of $20 a month to spend on root beer and DVDs. Calculate the equation for Marc's budget line (with the quantity of root beer on left side).
Marc has a budget of $20 a month to spend on root beer and DVDs. Calculate Marc's real income in terms of root beer. Calculate his real income in terms of DVDs.
What is the relative price of root beer in terms of DVDs? What is the opportunity cost of a bottle of root beer?
Draw two budget lines to show the effect of a fall in income on the quantity of used clothing purchased.