1. Metropolitan Zoo is considering changing its pricing structure. Currently, the zoo charges an entrance fee of $8 per person. The Zoo estimates that $500,000 people (200,000 adults and 300,000 children) will visit the soo over the next year if it continues the existing pricing policy. An alternative policy would be increase the fee for adults to $10 per adult but lower the fee for children to $5 per child. Under this alternative policy, the zoo estimates that the adult attendance will drop to 180,000 over next year but children’s attendance will increase to 330,000. If the change in the attendance is the only consequence of this decision, what are its costs and benefits? Is the alternative policy is good idea? 2. As your prize as a game show contestant, you are offered the choice between (a) one ton of olive oil or (b) a trip to Italy, including an airline ticket, 7 nights’ lodging, and a rental car for a week. You have always wanted to go to Italy and know that you could never use
This is the end of the preview.
access the rest of the document.