1. You're the CEO of an airplane manufacturing firm. You've spent $2 million on research and development designing a new plane. Due to delays and other problems, you estimate you'll need to spend $1 million more before you can start producing the plane and selling it. You estimate you'll only make $1.4 million in revenue from selling the plane. On the other hand, you can design an upgrade for an existing design for $750,000. You estimate you can make $1.25 million from selling the upgraded version of the old design. What should you do?

a. _____________________________

2.You're trying to decide how to spend your weekend. You could go to the movies with friends. The price of a movie ticket is $10, but you would pay up to $15 for the ticket. Alternatively, you could go bowling. The price to go bowling is $7, and you value bowling at $10. Finally, you could also go to the park and play some football. If you decide to go to the park with some friends and play football, what is the opportunity cost?

a. ____________