1. The president of a small firm has been complaining to the controller about rising labor and material costs. However, the controller notes that the average costs have not increased during the past year. Is it possible?
2. A local entrepreneur who has been running a profitable business for many years recently purchased a three-way liquor license. This license gives the owner the legal right to sell beer, wine, and spirits in her restaurant. The cost of obtaining the three-way license was about $75,000, since only 300 such licenses are issued by the state. While the license is transferable, only $65,000 is refundable if the owner chooses not to use the license. After selling alcoholic beverages for about a year, the restaurateur came to the realization that she was losing dinner customers and that her profitable restaurant was turning into a noisy, unprofitable bar. Subsequently, she spent about $6,000 placing advertisements in various newspapers and restaurants magazines across the state offering to sell the license for $70, 000. After a long wait, she finally received one offer to purchase her license for $66,000. What is your opinion of the restaurateur's decision? Would you recommend that she accept the $66,000 offer?
3. If Boeing produces 9 jets per month, its long-run total cost is $9 million per month. If it produces 10 jets per month, its long-run total cost is $9.5 million per month. Does Boeing exhibit economies or diseconomies of kale in producing jets?