1. Richard runs a pizza delivery restaurant. List the three key economic questions, and give relative examples as they apply to Richard’s restaurant. Explain. How could thinking at the margin help Richard increase his revenue?
2. Joe Schmuckatelli owns and operates a widget manufacturing plant that sells its products in local home improvement stores. The plant occupies 40 acres on the outskirts of Omaha and employs 52 workers. Give examples of each of the five factors of production in Joe's business.
3. Metro Airlines runs 10 flights per day at a total cost of $50,000, which includes $30,000 in fixed costs for airport fees, airplanes, and the reservation system and $20,000 in variable costs for flight crews, fuel, baggage handlers, and food service. If an 11th flight would have 25 passengers, each paying $100, would it make economic sense to offer the flight? If a 12th flight only drew 15 passengers, would it make sense to offer it? Discuss and show your math.
4. Critical Thinking: Although still not yet fully implemented Congress passed a bill creating national health care system, called the Affordable Care Act, also called Obama-care. In what ways do the principles of economics relate to this decision? Describe how each relates and what issues we must consider.