-Suppose a factory can be designed to produce either trucks or cars. The figure above shows the marginal cost and marginal benefit of producing trucks in terms of the forgone cars.
a) What is the marginal benefit of the 25th truck?
b) What is the marginal cost of the 25th truck?
c) Should the 25th truck be produced? Why or why not.
d) What is the marginal benefit of the 75th truck?
e) What is the marginal cost of the 75th truck?
f) Should the 75th truck be produced? Why or why not?
g) What is the allocatively efficient quantity of trucks?
Definitions:
Uncertainty Avoidance
A cultural dimension that describes the extent to which people in a society are uncomfortable with ambiguity, uncertainty, and unstructured situations.
Role Perceptions
An individual’s view and understanding of the responsibilities, behaviors, and actions required by their role within an organizational context.
Individual Rights Principle
An ethical guideline that stresses the importance of respecting and protecting the rights of individuals in decision-making processes.
Persistence
The quality of continuing firmly or obstinately in a course of action in spite of difficulty or opposition.
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