Consider an individual who is trying to determine the optimal allocation of health, H, and a home good, Z.Draw the Health PPF for this individual.
September 3, 2020
Most public utilities (gas, electricity, water, and local telephone companies, for instance) are subject to rate of return regulation, under which a
September 3, 2020

Suppose that you are an airline executive and you come to work one morning to find a memorandum on our desk indicating that the Boeing 747 that your company leased to fly between New York and London is bringing in revenues of $200,000 per day. You also know that the direct operating expenses (wages for the flight crew, aviation fuel, and that awful airline food) are $180,000 per day. Lastly, suppose you calculate that the interest cost of the loan to pay for the airplane was $40,000 per day. Should you continue to fly the plane? Why might your answer depend on the decision time frame, and what additional information would you need?

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