Lube Job. Many gas stations and three specialty shops (Pennzoil, Jiffy Lube and Valvoline) do oil changes in Charleston, WV. You've probably been to one of these and know the productionmethod. A Jiffy Lube manager recently got a great idea: instead of using the conventional 3 bay station, he was going to enlarge his operation to 10 bays. He reasoned he'd be able to take advantage of economies of scale and drive out the competition. Do you think his idea will be successful? Why or why not?
Pick an economist: Jeremy Bentham, J.S. Mill or Alfred Marshall. What did he add to
economic science?
Home, Sweet Home. Suppose Ms. Profligate and Mr. Discipline both purchase identical $185,000 homes in Marietta, GA on January 1, 2012. They both have good credit and qualify for a loan with no down payment and 4.8% financing. Profligate take a 15 year loan whereas Discipline take a 30 year loan and reinvests the monthly difference in payments in a the S&P Index fund paying 8.2% per year. Compare their position after 10 years (payment 120). Who has the least-cost home ownership and by how much? (Hint: use the monthly compounding formula FV = PV [(1+i)n -1 / i)] and use an online amortization tool.)
Take me out to the ballpark. It's nearly baseball time and baseball franchises are thinking about pricing their products. Assume a team sells three concessions: hotdogs, soda and nachos. For hotdogs, the average fan's MU for units 1, 2, and 3 is 150, 125, and 80 utils. For soda, MU for units 1, 2, and 3 is 130, 100 and 60. For nachos, it's 140, 120 and 100. The average fan spends $25 per night on concessions. Hotdogs cost $5, nachos $4 and sodas $3. A) what is the composition of the average fan's spending? B) how would this spending pattern change if hotdog prices rose to $5.25 and sodas fell to $2.50?