Explain your answer in terms of rivalry and excludability.

Scenario:

The information here shows that the
quantity of pies produced per hour at Pearl’s Pie Factory depends on the number
of workers.

# of Workers	Pies per Hour	Marginal Product of Labor	Cost of Factory	Cost of Workers	Total Cost of Inputs
0	0	Not Applicable	$30	0	$30
1	50	50	$30	$10	$40
2	90	40	$30	$20	$50

Reference
the scenario above to answer these questions:

1. What are the fixed
costs for Pearl’s Pie Factory?

2.
What
are the variable costs for Pearl’s Pie Factory?

3. Pearl has
determined that her average total cost for a pie is 80 cents a pie. What does
this mean? How does this differ from each pie’s marginal costs?

4. Name the
opportunity costs for Pearl’s Pie Factory.

5. What are the
implicit costs? Explicit costs?

6. How are the costs
shown on the table affecting Pearl’s economic
profit? Is there an area she might look to in order to decrease implicit costs?
Explicit costs?

Scenario:

Your
local airport recently started providing wireless Internet access throughout
the airport for free. However, very few people have been using the free
Internet, primarily because the airport serves a medium- to small-sized
community.

Reference
the scenario above to answer these questions:

1. Initially, what
type of good is the wireless Internet provided by the airport? Explain your
answer in terms of rivalry and excludability.

2.
Suppose
that several months later, more people have learned that the Internet service
is available at the airport and usage has tripled. The connection speed has
greatly slowed based on the recent high usage. Now what type of good is the
wireless Internet service? Explain your answer in terms of rivalry and
excludability.

3. What problems or
economic issues can you determine from this type of good?

4. Select one of the
problems you identified and offer a solution for how you might correct this
issue.