State the correct economic criterion for each situation

Reference no: EM132154477

Question: As in Problem 1-18, state the correct economic criterion for each of the following situations.

(a) The engineering school raffled off a car; tickets sold for $2 each or three for $5. When the students were selling tickets, they noted that many people had trouble deciding whether to buy one or three tickets. This indicates the buyers' criterion was.

(b) A student organization bought a soft-drink machine for use in a student area. There was considerable discussion over whetherthey should set the machine to charge 75c, $1, or $1.25 per drink. The organization recognized that the number of soft drinks sold would depend on the price charged. Eventually the decision was made to charge $1. The criterion was.

(c) In many cities, grocery stores find that their sales are much greater on days when they advertise special bargains. However, the advertised special prices do not appear to increase the total physical volume of groceries sold by a store. This leads us to conclude that many shoppers' criterion is.

(d) A recently graduated engineer has decided to return to school in the evenings to obtain a master's degree. He feels it should be accomplished in a manner that will allow him the maximum amount of time for his regular day job plus time for recreation. In working for the degree, he will.

Problem 1-18: The three economic criteria for choosing the best alternative are maximize the difference between output and input, minimize input, and maximize output. For each of the following situations, what is the correct economic criterion?

(a) A manufacturer of plastic drafting triangles can sell all the triangles he can produce at a fixed price. As he increases production, his unit costs increase as a result of overtime pay and so forth. The manufacturer's criterion should be.

(b) An architectural and engineering firm has been awarded the contract to design a wharf for a petroleum company for a fixed sum of money. The engineering firm's criterion should be.

(c) A book publisher is about to set the list price (retail price) on a textbook. The choice of a low list price would mean less advertising than would be used for a higher list price. The amount of advertising will affect the number of copies sold. The publisher's criterion should be.

(d) At an auction of antiques, a bidder for a particular porcelain statue would be trying to.

Reference no: EM132154477

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