Managerial Economics - If Congress Cuts Out the Nasa Space Station, We Will Have Wasted All the Resources That We Have Already Spent on It. Therefore, We Must Continue Funding It

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Managerial Economics

Evaluate the following statements using graphical analysis. Provide a brief narrative

explanation of your graph to support your evaluation. Make sure the awes and curves in

your graphs are properly labeled.

A)

“When demand for home heating oil increases, a shortage of heating oil will

occur.”

B)

“A decrease in the supply of random access memory (RAM) chips for personal

computers causes a shortage of RAM chips.”

Using optimization theory, analyze the following quotations:

a)“The optimal number of traffic deaths in the United States is zero.”

b)“Any pollution is too much pollution.”

c)“We cannot pull U.S. troops of Afghanistan. We have committed so much already.”

d)“If Congress cuts out the NASA space station, we will have wasted all the resources

that we have already spent on it. Therefore, we must continue funding it.”

e)“Since Jet Green Airways has experienced a 25 percent increase in its insurance

premium, the airline should increase the number passengers it serves next quarter order

to spread the increase in premiums over a larger number of tickets.”

Two partners who own progressive Business Solutions, which currently operates out of

an office in a small town near Boston, just discovered a vacancy in an office building in

downtown Boston. One of the partners favors moving downtown because she believes

the additional business gained by moving downtown will exceed the higher rent at the

downtown location plus the cost of making the move. The other partner at PBS opposes

moving downtown. He argues, ‘we have already paid for office stationery, business

cards, and a large sign that cannot be moved or sold. We have spent so much on our

current office that we can’t afford to waste this money by moving now.” Evaluate...