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| | :Decreasing (Isaac) | | :Decreasing (Isaac) |
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| | + | :The plan would fail because there is a decreasing returns of scale in the restaurant, because more waitresses would result in more wasted time talking to each other and waitresses getting in the way of each other. (Shanna) |
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| | 3. Give an example of a "short run" cost for a firm, and give an example of a "long run" cost. This can refer to any type of firm, from a grocery store to a baseball team to a homeschool. | | 3. Give an example of a "short run" cost for a firm, and give an example of a "long run" cost. This can refer to any type of firm, from a grocery store to a baseball team to a homeschool. |
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| | + | :An example of a short run cost for a clothing store would be the boss putting someone working behind the customer-service counter into the store pricing articles of clothing, because they had a lack of people pricing clothing. An example of a long run cost would be the boss hiring another person to be pricing clothing, thus fixing the problem permanently, rather then just temporary as in the first example. (Deborah) |
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| | + | :An example of a short run cost would be to hire an employee for a short amount of time, or hiring an employee to work overtime. An example of a long term cost would be buying better equipment or expanding the store. (Anna) |
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| | 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.) |
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| | 11. Are "long run" average costs lower than "short run" average costs and, if so, why? | | 11. Are "long run" average costs lower than "short run" average costs and, if so, why? |
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| | + | :The long run average costs would be less because you may have to pay more than the short run at first, but eventually the long run would pay for itself and then some. Because long run is more efficient. (Seth) |
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| | 12. (Difficult, but try): Your firm seeks to produce a certain level of output in the most efficient way (the lowest cost). It should use its resources in which of the following ways: | | 12. (Difficult, but try): Your firm seeks to produce a certain level of output in the most efficient way (the lowest cost). It should use its resources in which of the following ways: |
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| | 13. Charity, revisited: Sloan's charitable efforts (Sloan-Kettering) have lasted longer than his business efforts (General Motors). Is this just by chance, or are there reasons why charity lasts longer than business? Feel free to revisit the issue of the interplay between the free market and charity. | | 13. Charity, revisited: Sloan's charitable efforts (Sloan-Kettering) have lasted longer than his business efforts (General Motors). Is this just by chance, or are there reasons why charity lasts longer than business? Feel free to revisit the issue of the interplay between the free market and charity. |
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| | + | :Charity lasts longer than businesses because they have the support of God and people because everyone feels good when they donate money for a cause. ... God made us as perfect beings but we were led away by temptation. We lost the gifts that God had given us and charity is a way for us to give back to God and repent for the things we have done. In all of us, there is a desire to do something good. (Veronika) |
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| | === Extra Credit for Anyone === | | === Extra Credit for Anyone === |
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| | 14. The most efficient "division of labor" in the world is ... traditional marriage between a man and woman. | | 14. The most efficient "division of labor" in the world is ... traditional marriage between a man and woman. |