A business that uses part time employees to provide tutoring services to students is considering expanding during mid-term and final weeks. However, to lure extra tutors, they need to pay higher rates, or shift some of their temps over from other locations (schools in different cities).

1.Analyze the decision from an economic viewpoint, including:

a.What were the marginal benefits?

b.What were the marginal costs (not just dollar-costs, but include any opportunity costs)?

c.How did you compare the marginal costs with the marginal benefits?

d.Were there any sunk costs involved? Did you include them in your analysis?