Economic 101

cGraw-Hill Discussion Questions: onnect . When cell phones were first introduced, bandwidth was limited, which led to economically interesting pricing structures. One CC Library by Spring offered 4,000 free minutes for $39.99 a month. The fine print revealed a catch. Only 350 of those minutes were oogle Drive anytime minutes; the remaining were restricted to evening and weekend usage. If you went over your allotted time, you were charged 35 cents per minute for any additional minutes. Jet Tutor o What was your marginal cost? Graph it. What would your average variable cost curve for peak time usage have looked like? o If you did not keep track of your usage, how would you figure your marginal cost? Why did firms offer such confusing plans o Were firms that charged this way in favor of or against portability of phone numbers? Why are these offers no longer prevalent? . A major issue of contention at many colleges concerns the cost of meals that is rebated when a student does not sign up for the meal plan. The administration usually says that it should rebate only the marginal cost of the food alone, which it calculated at, say, $1.25 per meal. Students say that the marginal cost should include more costs, such as the saved space from fewer students using the facilities and the reduced labor expenses on food preparation. This can raise the marginal cost to $6.00. . Who is correct, the administration or the students? How might your answer differ if this argument were being conducted in the planning stage before the dining hall is built o If you accept the $1.25 figure of a person not eating, how could you justify using a higher figure of about $6.00 for the cost of feeding a guest at the dining hall, as many schools do