Maccro tut 1 Class Problems

Maccro tut 1 Class Problems - Business Macroeconomics...

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Business Macroeconomics, Tutorial 1 CFO: Principles of Macroeconomics, 9 th edition Chapters 1 and Ch 1 App. MP: Macroeconomics, 9 th ed. Chapters 1 and Ch 1 App. Tutorial 1 What is Economics? Class Problems and Applications: Situation #1 Assume that you have hired three executives to run your company each with a different job. All are equally productive and each can do the other person’s job if necessary. Assume that the first executive’s contribution to the company is worth $1,000,000; the second one is worth $800,000 and the third one is worth $500,000. 1.Referring to Situation #1 suppose that for the time being you can only afford to hire the first executive. What is the opportunity cost of the first executive’s work from the viewpoint of the company? Explain. 2.Referring to Situation #1 suppose that you can now hire two workers. What is the opportunity cost of the second executive’s work from the viewpoint of the company? Explain. 3.If a good is scarce, does that imply that there is a shortage of it? 4.What are sunk costs ? 5. For each of the following, list whether the topic is microeconomic or macroeconomic in nature: (a.) The price of gasoline. (b.) The national unemployment rate. (c.) The quantity of new cars sold each year. (d.)
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Maccro tut 1 Class Problems - Business Macroeconomics...

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