Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 21, Problem 15CQ
To determine
The problem of shirking.
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Economics: Private and Public Choice (MindTap Course List)
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- You are the manager of a train company. Recently total sales have been a bit low and you are now considering means to give sales a boost. Market research has shown that currently the price of train tickets is historically low. Market research has also shown that the demand curve for train tickets is downward sloping. You may assume that your company is not a price taker on the market. b)One of your colleagues has suggested that it is important to lower the price of train tickets. In that case, she argues, the demand will increase. Do you agree with her? Explain why. c) She continues her argument by concluding that if the demand goes up, the total value of sales of train tickets should therefore increase. Do you agree with her? Explain why. hi, can you answer part b and pact c for this question in detail please, thanksarrow_forwardYou are the manager of a train company. Recently total sales have been a bit low and you are now considering means to give sales a boost. Market research has shown that currently the price of train tickets is historically low. Market research has also shown that the demand curve for train tickets is downward sloping. You may assume that your company is not a price taker on the market. i) One of your colleagues has suggested that it is important to lower the price of train tickets. In that case, she argues, the demand will increase. Do you agree with her? Explain why. ii) She continues her argument by concluding that if the demand goes up, the total value of sales of train tickets should therefore increase. Do you agree with her? Explain why.arrow_forwardHow can stages of production be used to determine the most profitable number of workers to hirearrow_forward
- For the following alternatives, argue whether it is true, false or uncertain, according to the following statement:"If the marginal productivity value (MVP) of the last worker hired is $10 and the wage is $12, then the firm":(a) Will have an economic utility.b) Needs to decrease the wagec) It needs to expand productiond) It needs to decrease the number of workers hired.arrow_forwardQ87 Consider a firm that uses only labour and capital as inputs. At the present use of labour and capital, the MP of labour is four times the MP of capital and the price of labour is twice the price of capital. To minimise its costs for a given level of output, the firm should... a. Decrease both capital and labour. b. Increase both labour and capital. c. Decrease capital and increase labour. d. Stay at its present factor mix. e. Decrease labour and increase capital.arrow_forward
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