Suppose that the president proposes a new law aimed at reducing healthcare costs: All Americans are required to eat one apple daily.

How would the law affect the marginal product and the value of the marginal product of apple pickers?

Suppose that the president proposes a new law aimed at reducing healthcare costs, All Americans are required to eat one apple daily.

How would the law affect the demand and equilibrium wage for apple pickers?

Suppose that the president proposes a new law aimed at reducing healthcare costs: All Americans are required to eat one apple daily.

a. How would this apple-a-day law affect the demand and equilibrium price of apples?

b. How would the law affect the marginal product and the value of the marginal product of apple pickers?

c. How would the law affect the demand and equilibrium wage for apple pickers?

Show the effect of each of the following events on the market for labor in the computer manufacturing industry. a. Congress buys personal computers for all U.S. college students. b. More college students major in engineering and computer science. c. Computer firms build new manufacturing plants.

Suppose that the president proposes a new law aimed at reducing healthcare costs, All Americans are required to eat one apple daily.

How would the law affect the marginal product and the value of the marginal product of apple pickers?

A commercial fisherman notices the following relationship between hours spent fishing and the quantity of fish caught:

$$\begin{aligned} &\begin{array}{lc} &\text { Quantity of Fish }\\ \text { Hours } & \text { (in pounds) } \\ \hline 0 \text { hours } & 0 \mathrm{lb} . \\ 1 & 10 \\ 2 & 18 \\ 3 & 24 \\ 4 & 28 \\ 5 & 30 \end{array} \end{aligned}$$

The fisherman has a fixed cost of $\$ 10$ (his pole). The opportunity cost of his time is $\$ 5$ per hour. Graph the fisherman's total-cost curve. Explain its shape.

A commercial fisherman notices the following relationship between hours spent fishing and the quantity of fish caught:

$$\begin{aligned} &\begin{array}{lc} &\text { Quantity of Fish }\\ \text { Hours } & \text { (in pounds) } \\ \hline 0 \text { hours } & 0 \mathrm{lb} . \\ 1 & 10 \\ 2 & 18 \\ 3 & 24 \\ 4 & 28 \\ 5 & 30 \end{array} \end{aligned}$$

What is the marginal product of each hour spent fishing?

The city government is considering two tax proposals: • A lump-sum tax of $300 on each producer of hamburgers. • A tax of$1 per burger, paid by producers of hamburgers. a. Which of the following curves—average fixed cost, average variable cost, average total cost, and marginal cost—would shift as a result of the lump-sum tax? Why? Show this in a graph. Label the graph as precisely as possible. b. Which of these same four curves would shift as a result of the per-burger tax? Why? Show this in a new graph. Label the graph as precisely as possible.

The city government is considering two tax proposals:

• A lump-sum tax of $\$ 300$ on each producer of hamburgers.
• A tax of $\$ 1$ per burger, paid by producers of hamburgers.

Which of these same four curves would shift as a result of the per-burger tax? Why? Show this in a new graph. Label the graph as precisely as possible.

You are the chief financial officer for a firm that sells digital music players. Your firm has the following average-total-cost schedule:

$$\begin{array}{lc} \text{ Quantity } & \text{ Average Total Cost } \\ \hline 600 \text{ players } & \$ 300 \\ 601 & 301 \end{array}$$

Your current level of production is $600$ devices, all of which have been sold. Someone calls, desperate to buy one of your music players. The caller offers you $\$ 550$ for it. Should you accept the offer? Why or why not?

Your aunt is thinking about opening a hardware store. She estimates that it would cost $500,000 per year to rent the location and buy the stock. In addition, she would have to quit her$50,000 per year job as an accountant.

Define opportunity cost

Compare the following two pairs of goods:

• Coke and Pepsi
• Skis and ski bindings

In which case do you expect the indifference curves to be fairly straight? In which case do you expect the indifference curves to be very bowed?

Compare the following two pairs of goods:

• Coke and Pepsi
• Skis and ski bindings

In which case will the consumer respond more to a change in the relative price of the two goods?

The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies’ complete annual reports, including the notes to the financial statements, are available online.

Instructions Use the companies’ financial information to answer the following questions.

• a. How much working capital do each of these companies have at the end of 2014?
• b. Compute each company’s (a) current cash debt coverage, (b) cash debt coverage, (c) current ratio, (d) acid-test ratio, (e) accounts receivable turnover, and (f) inventory turnover for 2014. Comment on each company’s overall liquidity.
• c. What types of loss or gain contingencies do these two companies have at the end of 2014?