Problem
I. You were planning to spend Saturday working at your part-time job, but a friend asks you to go skiing. What is the true cost of going skiing? Now suppose you had been planning to spend the day studying at the library. What is the cost of going skiing in this case? Explain
II. Analyze the market for organic foods in the US. Analyze the demand for organic foods, the supply of organic foods, and the resulting equilibrium price and quantity exchanged.
III. A profit-maximizing firm in a competitive market is currently producing 100 units of output. It has average revenue of $10, average total cost of $8, and fixed cost of $200.