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Author Question: A one-day ticket to Sea World costs 37, but a two-day pass costs 42 . What is the average cost per ... (Read 61 times)

ereecah

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on: Jun 30, 2018
A one-day ticket to Sea World costs 37, but a two-day pass costs 42 . What is the average cost per day for a one-day pass? For a two-day pass? What is the marginal cost of a second day at Sea World? Why might Sea World charge such a price for a second day's entrance to the park?

Question 2

Investment in human capital implies:
 a. investment on machines, technological development, and equipments.
  b. expenses on education.
  c. expenses on paying interest for hiring real capital.
  d. expenses on the purchase of land.
  e. profit of the entrepreneurs.


brittanywood

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Reply #1 on: Jun 30, 2018
Answer to Question 1

The one-day pass average cost is 37 . The average cost per day of the two-day pass is 21 . The marginal cost of the second day is 5 . Sea World knows that due to diminishing marginal utility, the value of the first day's visit is high, but the second day is much lower. So in order to entice people to visit for a second day and increase Sea World revenues, the price reflects the decrease in value to individuals.

Answer to Question 2

b


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