Managerial Economics 12th Edition by Christopher Thomas,Charles Maurice

Exercise 1

Using optimization theory, analyze the following quotations:
a. "The optimal number of traffic deaths in the United States is zero."
b. "Any pollution is too much pollution."
c. "We cannot pull U.S. troops out of Afghanistan. We have committed so much already."
d. "If Congress cuts out the International Space Station (ISS), we will have wasted all the resources that we have already spent on it. Therefore, we must continue funding the ISS."
e. "Since JetGreen Airways has experienced a 25 percent increase in its insurance premiums, the airline should increase the number of passengers it serves next quarter in order to spread the increase in premiums over a larger number of tickets."