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Mgt 571

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Chapters 1&2
MGT 571
Joseph Suto
Chapter 1
1.1: A positive analysis would be that raising the minimum wage to $7.00 an hour would increase workers wages. A normative analysis would be that all working people should earn a wage to live on.
1.3: The reason it is important to look at a good’s real price as opposed to its nominal price is the real price accounts for changes in the value of money. The nominal price does not reflect the changes on what money is worth at different times.
1.5: Vending machines are prevalent in Tokyo because there is very little additional explicit and implicit cost to these vending machines. There are few employees to pay, very little over head in buildings rental or space permits to place newsstands. This allows the owner to make money for very little work and investment of time and money.
1.9: False, The $5 Billion is a sunk cost and cannot be recovered. If the revenues are expected to continue to be lower than cost then it should be dropped and find a new venture for revenue.
1.10: President Lincoln was not under paid for his services in 1863. That $25,000 salary in 1863 would be worth $626.111.00 in today’s dollars based on the following calculation:
2011 price = 1863 price x(2011 CPI/1950 CPI)
$626,111.00= $25,000.00x(225.4/9)
Chapter 2
1: The supply and demand model can be used to in reverse to explain market outcomes by splitting the model into four sections and based on the position of the new equilibrium we can determine what factors caused the shift and the new equilibrium.
3: The term “other things constant” means there are numerous factors in why there are shifts in demand. Movement along the demand curve is a hypothetical situation where price affects demand by the consumer only if all other variables are assumed to stay the same.
2.1: The positive relationship between UI and the UR is the longer a

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