MYECONLAB MACRO ECONOMICS YTC >I<
MYECONLAB MACRO ECONOMICS YTC >I<
17th Edition
ISBN: 9781323509425
Author: Hubbard
Publisher: PEARSON C
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Chapter 6, Problem 6.3.6PA
To determine

The cost of producing pizza for Paolo and Alfredo.

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In an article in the New York Times (Is Junk Food Really Cheaper? September 24, 2011), Mark Bittman compares the cost of a McDonalds meal for four ($28) to the cost of a home cooked chicken with vegetables dinner ($13.78). An economist would say that the "true" cost of the home cooked meal is than $13.78, as we need to add to the cost of groceries (money you pay to buy the ingredients chicken and vegetables) also the lower, amount of money you will be saving when you spend less money on food. lower, negative health effects of eating too much fast food lower, opportunity cost of time you spend to prepare and cook your dinner. higher, benefits of healthy home. cooking, higher, opportunity cost of time you spend to prepare and cook your dinner.
We R' Write currently purchases the wood used to make their pencils, the rubber used to make erasers for their pencils, and the lead for the pencils from other firms. However, We R' Write is considering purchasing these firms so they can personally produce all the components used for making pencils. As an economist, what would you call the current way We R' Write is acquiring the products needed to make their pencils (purchasing from other firms)? What benefits and problems could We R' Write have with the current way of doing business? As an economist, what would you call We R' Write's proposal to purchase the firms that make the pencil components? What benefits and problems could We R' Write have concerning the purchase of these other firms?
Briefly explain the term incremental innovations. Which companies in terms of the size (small, medium, large size) have more economic incentives to produce these?
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