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Your answer(s) should be in paragraph form. with complete sentences. Grammar is important !One or two paragraphs should be sufficient to answer each question.Support your

Your answer(s) should be in paragraph form. with complete sentences. Grammar is important !One or two paragraphs should be sufficient to answer each question.Support your answer with economic reasoning and facts.

5-1 George's T-Shirt Shop

George's T-Shirt Shop produces 5,000 custom printed T-shirts per month. George's fixed costs are $15,000 per month. The marginal cost per T-shirt is a constant $4. What is his break-even price? What would be George's break-even price if he were to sell 50% more shirts?

5-2 Net Present Value

Suppose an initial investment of $100 will return $50/year for three years (assume the $50 is received each year at the end of the year). Is this a profitable investment if the discount rate is 20%?

5-3 Doctor's Human Capital

Probably the most important source of capital is human capital. For example, most medical doctors spend years learning to practice medicine. Doctors are willing to make large investments in their human capital because they expect to be compensated for doing so when they begin work. In Canada, the government nationalized the healthcare system and reduced doctors' compensation. Is this a form of post-investment hold-up?

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