- Peter pays $9.99 for an all-you-can eat pizza buffet. How would you predict the number of pizzas that Peter will eat using utility theory?
- Consider an NFL quarterback who makes millions of dollars per year and a schoolteacher. Who is likely to receive more economic rent in his/her job? Explain your answer.
3.You have won the lottery. There are two payment options for you. The first option is a lump sum payment of $10 million that you will receive immediately. The second option is an annual payment of $1 million for each of the next 12 years. Assume there is no inflation. How would you make a decision between the two options?
- “In economics, the short run commonly refers to a period within one year and the long run is a period longer than one year.” Explain why this is incorrect, or at least an oversimplification.
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