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From the ninth century B.C. until the proliferation of gunpowder in the fifteenth century A.D., the ultimate weapon of mass destruction was the catapult (John N. Wilford, “How Catapults Married Science, Politics and War,” New York Times, February 24, 2004, D3). As early as the fourth century B.C., rulers set up research and development laboratories […]

 

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By studying, Will can produce a higher grade, on an upcoming economics exam. His production function depends on the number of hours he studies marginal analysis problems, A, and the number of hours he studies supply-and-demand problems, R. Specifically, His roommate David’s grade-production function is . a. What is Will’s marginal productivity of studying supply-and-demand […]

 

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Meredith’s firm sends her to a conference for managers and has paid her registration fee. Included in the registration fee is free admission to a class on how to price derivative securities such as options. She is considering attending, but her most attractive alternative opportunity is to attend a talk by Warren Buffett about his […]

 

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In February 2003, Circuit City Stores, Inc. replaced skilled sales representatives who earn up to $54,000 per year with relatively unskilled workers who earn $14 to $18 per hour (Carlos Tejada and Gary McWilliams, “New Recipe for Cost Savings: Replace Highly Paid Workers,” Wall Street Journal, June 11, 2003). Suppose that sales representatives sell one […]

 

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