The owner of a recently built cruise ship is deciding how to price its rooms. What advice would you give the owner?
a. Since MR
b. Since MR
c. Since MR>MC, price to fill capacity
d. Both A&C
QUESTION 2Stuck in Cleveland You purchased a roundtrip ticket to a friend's wedding in Cleveland on Saturday for 400, but on Sunday you discover your return flight is canceled due to weather. The airline will not be able to get you back home until late Monday but Greyhound has an overnight bus route that arrives at 6:00am Monday for 60 . What is the opportunity cost of missing work on Monday?
QUESTION 3Owners of a parking lot are deciding whether or not to add more parking spaces to the lot. The owners should stop adding parking spaces where:
a. LRMR=LRMC
b. LRMR>LRMC
c. LRMR
d. None of the above
QUESTION 4Fast Food Terminals III After firing cashiers to install touchscreens for patrons to place orders, Taco Casa determined that their average cost per touchscreen order was 0.65 . After determining that the average compensation cost per human mediated order was 0.60 per order, they revert back to human order takers. Then why did the realized average cost per order with humans come in at 0.70?
QUESTION 5Owners of a parking lot are deciding whether or not to add more parking spaces to the lot. The owners should increase parking spaces as long as:
a. LRMR=LRMC
b. LRMR>LRMC
c. LRMR
d. None of the above
QUESTION 6Fast Food Terminals II Taco Casa is considering installing touch screen terminals for patrons to place their food orders. A terminal can typically accommodate the placement of 15 orders each hour while a human can process 20 orders each hour. If employee costs are 7.50/hour in wages and 4.50/hour in taxes, benefits and insurance, what is the per order opportunity cost of a touch screen?
QUESTION 7All of the following are true, except
a. Some consumers may infer high quality from high price
b. Low prices can indicate lower quality given that no other information is available
c. Promotional campaigns do not affect consumer's perception on quality
d. It makes more sense to raise price when advertising makes demand less elastic
QUESTION 8Fast Food Terminals Taco Casa is considering installing touch screen terminals for patrons to place their food orders. They discovered that installation costs at stores with four screens were 60,000 but were 80,000 at stores with six terminals. What are the marginal costs of installing another terminal at a location?
QUESTION 9For products like parking lots and hotels, costs of building capacity are mostly fixed or sunk and firms in this industry typically face capacity constraints. Therefore,
a. If SRMR>SRMC at capacity, then the firms should price to fill capacity
b. If SRMR
c. If LRMR>LRMC at capacity, then the firms should price to fill capacity
d. If LRMR>LRMC at capacity, then the firms should price to fill capacity
Quick Reply
