Chapter 1-4 - S2 Universidad Iberoamericana UNIBE BBA in...

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S2 Universidad Iberoamericana UNIBE BBA in International Business Microeconomics Professor Osvaldo Lagares Homework Chapter 1-4 Valerie Bodden Kluge (10-0014) Maria Gabriella Liriano Theovaldo Galan (08-0965)
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September 27, 2010 Santo Domingo, Dominican Republic
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Chapter 1 Page 20-21 Exercises: 1.3, 1.8 Page 34 1A.1, 1A.3, 1A.5, 1A.6, 1A.7 Page 20 1.3) Bank robberies are on the rise in New Jersey, and according to the FBI this increase has little to do with the economic downturn. The FBI has claims that they have allowed themselves to become easy targets by refusing to install clear acrylic partitions called bandit barriers,” which separate bank tellers from the public. Of the 193 banks robbed in New Jersey in 2008, only 23 had these barriers, and of the 40 banks robbed in the first 10 weeks of 2009 only 1 had a bandit barrier. According to a special agent with the FBI, Bandit barriers are a great deterrent. We’ve talked to guys who rob banks and as soon as they see a bandit barrier, they go find another bank. Despite this finding, many banks have been reluctant to install these barriers. Would banks have a strong incentive to install bandit barriers to deter robberies? Why then do so many banks not do so? As explained throughout the chapter, it is less expensive for the bank to deal or manage with these bank robberies, than it is to actually install the “bandit barriers.” Therefore they prefer to not install the barriers. 1.8) In a paper written by Bentley college economists Patricia M. Flynn and Michael A. Quinn, the authors state, “We find evidence that Economics is a good choice of major for those aspiring to become a CEO. When adjusting for size of the pool of graduates, those with undergraduate degrees in Economics are shown to have had a greater likelihood of becoming an S&P 500 CEO than any other major. “A list of famous economics majors published by Marietta college includes business leaders Warren Buffet, Donald Trump, Ted Turner, and Sam Walton as well as former presidents George H.W. Bush, Gerald ford, and Ronald Regan. Why might studing
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economics be particularly good preparation for being the top manager of a corporation or a leader in government? We believe that since economics basically teaches how to look at the consequences, or trade-offs, that take place in every decision that one makes, all of these top managers and governmental leaders have the ability to understand and see the benefits and drawbacks of every decision taken. This prior knowledge in economics makes it a bit harder for them to take a bad decision. Page 34 1A.1) The following table shows the relationship between the price of custard pies and the number of pies Jacob buys per week. A)
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