BUSI620 Critical Thinking 4

Questions for Critical Thinking 4
Salvatore Chapter 8:

a. Discussion Questions: 2
b. Problems: 3, 4, 12(a) and (b), and spreadsheet problem 1
(p. 364).

Note:
1. P3(a):
Calculate and compare the profit under each flight.
2. P3(b) is
asking:Should Airway Express continue providing the flight between Los Angeles
and New York? Even if Airway Express decides not to fly, it still has to pay
the fixed costs of $3,000 per day. The evening flight with the return flight
the next afternoon is counted as 1 day, not 2 days.
3. P12: You do not
need to draw the chart.

Salvatore Chapter 9:

Problems: 7, 11, and spreadsheet problem 1.

Note:
1. P7: The
tariff-inclusive price will be $3(1+.33) = $4. What are the impacts of tariff
on domestic consumption, domestic production, imports, and government’s tariff
revenue? Show the numbers; for example, at figure 9-4, if you draw a line
starting at Px=$4 and parallel to the X axis, it will cross the demand curve,
Dx, at 500X. Therefore, youknow that the domestic consumption will decrease
from 600X to 500X.
2. P11: The goal
of publishers is to maximize profit.
3. Revised
spreadsheet problem 1: Just answer 1(a) and 1(d). For 1(d), change “For (a) to
(c)” to “For (a) only.”

Froebet al. Chapter 9:

Individual problems: 9-2 and 9-4.

Note: P9-2: Think about substitutes and complements. For
example, marijuana and snack foods are strong complements (or so we are told).

Froebet al. Chapter 11:

Individual problems: 11-4 and 11-5.

Note:
1. P11-4: Use the
carry trade to predict the impact of lower U.S. interest rates on Euro/$.

2. P11-5: Make
sure you explain the impact on the twin cities, not just 1 city.

Submit this assignment by 11:59 p.m. (ET) on Sunday of
Module/Week 4.