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| − | 1. The Lecture mentioned how a prior student in this course is working her way through college by working as a waitress in a fancy Manhattan restaurant. Suppose her boss tells her one day, "We were profitable last month. To double our profits this month, I'm going to doubt our number of waitresses so that we can be double the number of people we serve!" Our former student told him that his plan would fail because there is _____________ economies of scale in the restaurant: the more waitresses would result in more wasted time talking to each other, and waitresses getting in the way of each other. | + | 1. The Lecture mentioned how a prior student in this course is working her way through college by working as a waitress in a fancy Manhattan restaurant. Suppose her boss tells her one day, "We were profitable last month. To double our profits this month, I'm going to doubt our number of waitresses so that we can be double the number of people we serve!" But our former economics student told him that his plan would fail because there is _____________ returns of scale in the restaurant: more waitresses would result in more wasted time talking to each other, and waitresses getting in the way of each other. |
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| − | 2. ________ minus _________ is what kind of profit? Economic profit? Taxable profit? Or some other kind of profit? | + | 2. The difference between total revenue and explicit costs is what kind of profit? Economic profit? Taxable profit? Or some other kind of profit? |
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| | 3. Marginal product question | | 3. Marginal product question |
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| − | 4. <fix>Suppose the population doubled and the other utilized economic inputs (air, water, capital, etc.) doubled as needed. What would happen to economic output, such as new inventions and food production? In other words, what is the return to scale from increasing population (labor) and other inputs? | + | 4. Do you think the returns to scale from the world's population is increasing, constant or decreasing? Explain your answer. |
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| | 5. | | 5. |
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| − | 8. Suppose you invented fertilizer that is costly to make but has an ever-increasing marginal product. Suppose you own an acre of farmland in South Jersey, and now must decide between spending your money on buying more acres to use the fertilizer, or making more fertilizer. Which should you do? Explain.
| + | 9. 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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| − | 9. A company’s stock price often rises when it announces taking a large one-time write-off (or loss) on its accounting books. Using one or more principles learned in this course, can you explain reasons for that effect on the stock price?
| + | 10. |
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| − | 10. The tremendous economic growth of the 1980s and 1990s resulted from the “supply side” economic policies of President Ronald Reagan, which boosted production by cutting taxes and encouraging investment. Why might the supply side be more important than the demand side?
| + | 11. |
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| | == References == | | == References == |