Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 17, Problem 3.3P
To determine
The iPhone app that helps to avoid the misleading of information.
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The owner of Tommy's Technicians has found that his shop is losing money and he is in jeopardy of going out of business. Sales have remained constant for quite some time and now he is looking at ways to cut expenses to stay in business. Which of the following expenses is his best choice to try to immediately reduce and save him meaningful dollars so he can remain in business? (Hint: First consider which ones he has ultimate control over?)
Rent expense
Utilities expense
Payroll expense
Shop insurance expense
Advertising expense
You bought a ticket for a concert of Taylor Swift in Manchester for £400. If you want, you can return the ticket for a full refund up to the start of the concert. You were willing to pay up to £600 for that ticket. The train ticket from your home to Manchester and return costs £150. There are no other costs of going to the concert. You realise now that the concert is sold out. After checking various websites, you receive a firm offer for your concert ticket of £2100. If you do not go to the concert, your next best alternative for that day is watching a pay-per-view video of an Amy McDonalds concert on Netflix for £50 at home. Your willingness to pay for the pay-per-view video is £300 (Your willingness to pay for the concert ticket does not change over time.)
Which decision is the optimal decision in economic terms? What is the opportunity cost of going to the concert in Manchester? What is the opportunity cost of staying home? Calculate the net cost (or net benefit) if you decide to…
The following accompanying table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other
features of the computer are the same (that is, CPU speed is the only source of variation), and only the CPU speeds listed below are available for
purchase.
CPU
Total
Marginal Total |Marginal
GHz
Benefit
Benefit
Cost
Costs
2.0
$1,000
$900
2.5
$1,400
$100
3.0
$300
$1,200
3.5
$1,900
$1,500
4.0
$2,000
$400
Application of the Cost-Benefit Principle would lead one to purchase a
computer.
Chapter 17 Solutions
Principles of Economics (12th Edition)
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