Walter Waterson owns a lawn irrigation system business. He manages the installations and maintenance of these systems. Several customers are golf courses, but he serves a large group of residential customers as well. When he started the business 10 years ago, he promised to always operate within the legal limits of the law, but lately, the competition is eating him alive. Large competitors have hired illegal immigrants to perform the manual labor, and they do not pay taxes on these employees-they just pay them in cash at the end of the week. Employment taxes are a burden to him. Walter does not want to hire illegal workers. There's a risk if you permit an illegal worker to drive a truck; or, if he/she has an accident on the job. You have just studied business ethics in your class. You inform Walter that:. A) taxes only need to be paid for the owners. B) he is not only taking a chance that a bigger problem may occur, he is indirectly setting the ethics code for his business. C) small businesses may not be able to worry about ethics codes. These types of documents are better suited for big business. D) it is not unethical to try to better the lives of others. Everyone needs jobs.

Consider the local telephone company, a natural monopoly. the following graph shows the monthly demand curve for phone services and the company’s marginal revenue (mr), marginal cost (mc), and average total cost (atc) curves. 0 2 4 6 8 10 12 14 16 18 20 100 90 80 70 60 50 40 30 20 10 0 price (dollars per subscription) quantity (thousands of subscriptions) d mr mc atc 8, 60 suppose that the government has decided not to regulate this industry, and the firm is free to maximize profits, without constraints. complete the first row of the following table. pricing mechanism short run long-run decision quantity price profit (subscriptions) (dollars per subscription) profit maximization marginal-cost pricing average-cost pricing suppose that the government forces the monopolist to set the price equal to marginal cost. complete the second row of the previous table. suppose that the government forces the monopolist to set the price equal to average total cost. complete the third row of the previous table. under average-cost pricing, the government will raise the price of output whenever a firm’s costs increase, and lower the price whenever a firm’s costs decrease. over time, under the average-cost pricing policy, what will the local telephone company most likely do

Consider a treasury bill with a rate of return of 5% and the following risky securities: security a: e(r) = .15; variance = .0400 security b: e(r) = .10; variance = .0225 security c: e(r) = .12; variance = .1000 security d: e(r) = .13; variance = .0625 the investor must develop a complete portfolio by combining the risk-free asset with one of the securities mentioned above. the security the investor should choose as part of her complete portfolio to achieve the best cal would be a. security a b. security b c. security c d. security d

Suppose farmer lane grows and sells cotton in a perfectly competitive industry. the market price of cotton is $1.64 per kilogram, and his marginal cost of production is $1.44 per kilogram, which increases with output. assume farmer lane is currently earning a profit. can farmer lane do anything to increase his profit in the short run? farmer lane: a. cannot do anything to increase his profit. b. may or may not be able to increase his profit. c. can increase his profit by raising his price. d. can increase his profit by producing more output. e. can increase his profit by shutting down.