Changes

4.  Suppose you own a mechanics' shop that fixes cars, and you have 4 employees whom you pay $12 per hour.  On average your 4th employee can fix 3 cars an hour.  What is your marginal product (MP) and marginal cost (MC), and what is the minimum on average that you need to charge customers (your marginal revenue) for fixing cars?  (Assume your only cost is labor, and the customer pays the cost of any parts.)

4.  Suppose you own a mechanics' shop that fixes cars, and you have 4 employees whom you pay $12 per hour.  On average your 4th employee can fix 3 cars an hour.  What is your marginal product (MP) and marginal cost (MC), and what is the minimum on average that you need to charge customers (your marginal revenue) for fixing cars?  (Assume your only cost is labor, and the customer pays the cost of any parts.)

5.  Earlier in this course we learned that someone who obtains a college degree earns, over the course of his life, about $500,000 more than someone who does not.  How can you explain this fact in terms of the advantages of "long run" costs over "short run" costs?

5.  Earlier in this course we learned that someone who obtains a college degree earns, over the course of his life, about $500,000 more than someone who does not.  How can you explain this fact in terms of the advantages of "long run" costs over "short run" costs?

:The accounting loss would be $0. The economic loss is $8.00. Instead of wasting an hour watching TV, you could be doing something much more efficient.  (Amanda)

:The accounting loss would be $0. The economic loss is $8.00. Instead of wasting an hour watching TV, you could be doing something much more efficient.  (Amanda)

===Honors===

===Honors===