1. ECO 550 Week 9 Chapter Questions
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week-9-chapter-questions/
Week 9 Chapter 1 Question 7
Devise a hypothetical business situation in which buying a lookback call option on a
commodity may be a sound strategy for you. How about a down-and-out call option?
Week 9 Chapter 15 Question 2
2. How does your VMP change if the employer is a monopolist producer of its output but a
price-taker in the labor market?
Week 9 Chapter 15 Question 19
19 Most restaurant customer tip according to a percentage rule-between 15 and 25 percent
of the bill. Diners who have dinner and a $20 bottle of wine usually pay the same
percentage of the bottle price as diners who order a $100 bottle. Why, when the same
efforts must be made to uncork and pour both bottles?
Week 9 Chapter 16 Question 3
Lenders perceive that you are risky, so you must pay 12 percent annual interest to borrow
from one of them. You only receive 6 percent on funds you have deposited in the bank. Do
the opportunity costs of borrowing and using your own funds differ in this example?
Explain why or why not.