FOR THIS FIRST ASSIGNMENT QUESTION, YOU MUST MAKE UP A VALUE FOR MARGINAL UTILITY FOR IT TO MAKE ANY SENSE.
1. Assume the price of baseballs is $5 and baseball gloves is $20. Assume you have $100 total to spend on these items. Construct a table similar to the one on page 159. What is the point, based on the Equimarginal Rule, which has equal marginal benefit (or the closest) for the two purchases?
2. The Short Run Average Total Cost (SATC) curve is shaped like _____. The Long Run Average Total Cost Curve (LATC) is shaped like ____. What causes the different shapes?
3. Discuss a firm’s objective relative to its economic cost. Describe each of the firm’s economic cost, and whether these would be considered explicit or implicit. What is the difference between an economic profit and an accounting profit, give an example?
4. Critical Thinking: Human beings are odd creatures. We can predict the negative consequences of certain actions, and yet, we proceed with those actions. If people were logical and thought long term, no one would eat more doughnuts than fruit, no one would start smoking, no one would fail to save money for their retirement. So, why do so many people have bad eating habits, addictive behavior, and no savings? What does neuroscience tell us about this behavior?