How do costs play into your everyday life

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1. How do costs play into your everyday life? For example, why might it be cheaper to drive on a toll-road vs. a free-access interstate? Also, can you identify situations where you may fall victim to the sunk cost fallacy (we all do)?

2. When thinking about the theory of the firm, shirking, and principle-agent problems, we can find analogous situations in our personal lives. Make a Power Point presentation (for sharing with the class) two personal situations to illuminate this concept. For example, how does your mom get you to do chores? Or how do you control for shirking by those group members with lower GPAs, who have less to lose from poor individual performance?

3. Find a newspaper or magazine article that highlights a perfectly competitive situation. Write a 1-page paper on the economic performance of this market in terms of efficiency, costs, and profit.

Reference no: EM13185605

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