Concept explainers
A
in what manner firms and people decide if it’s worth to make investment in capital improvements.
Concept Introduction:
Capital Improvement: an addition or arrangement that improves the value of a property or replacement or upgrade that prolongs the lifespan of the asset.
A
Explanation of Solution
The firms and individuals determine if it’s worth it to invest in these resources based on these points:
The firms or individuals determine if it is worth to invest in capital improvements when the costs of additional capital are lesser than the revenue increase with the additional capital. In simple words, when the marginal returns from the capital is greater than the marginal cost of capital.
B
in what manner firms and people decide if it’s worth for new hires.
Concept Introduction:
Hiring: is defined as a practice of evaluating, finding and establishing a working relationship between new employees, contractors, interns etc
B
Explanation of Solution
For hiring additional workers, the firms and the individuals take their decisions by looking at the marginal returns of additional workers to the costs of hiring the additional workers. When the returns are greater than the costs of employing an additional worker, it would be worth hiring.
C
in what manner firms and people decide where to work.
C
Explanation of Solution
Despite this being akin to individuals and firms independently, in most cases, the location where to work and expansion is based on the conditions such as proximity to the market, the rules and regulations of a particular locality and availability of resources.
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Chapter 11 Solutions
ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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- The marginal benefit from each successive unit of medical care consumed declines BECAUSE each successive unit is more expensive to produce True Falsearrow_forwardIn the Human Capital approach, estimated monetary worth of life is MOST SENSITIVE to which key indicator Discount rate Social security payroll taxes Labour market earnings Workplace injury compensationarrow_forwardOver the last few decades out-of-pocket costs have formed a DECLINING proportion of total consumer expenditure on medical care True Falsearrow_forward
- Cost benefit analyses often assumes the following about consumers EXCEPT Consumers have clear preferences among choices they are exposed to Consumers purposely choose actions that result in higher satisfaction Consumers factor in uncertainty of outcomes in their decision-making regarding net benefits and costs Consumers lack information about attributes of market goods that are necessary for ranking their choice setarrow_forwardThe TRUE relationship between MARGINAL utility and an individual’s stock of health can be best described as a scatter plot True Falsearrow_forwardMany health economists believe that the United States spends its MARGINAL dollars on healthcare in a highly wasteful manner. This view is also known as “flat of the curve” medicine. True Falsearrow_forward
- Increasing provision of out-of-pocket cost calculators by major insurers are attempts to REDUCE price transparency for consumers True Falsearrow_forwardA price hike for medical goods/services that have an inelastic (i.e., <1) own-price elasticity of demand will tend to yield lower revenues True Falsearrow_forwardRisk Loving people are willing to pay insurance premiums that exceed their expected losses True Falsearrow_forward
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