Please read Chapter 1 in Tim Harford’s The Undercover Economist. Harford provides a non-text book introduction to the principles of economics. (You can find a copy of Chapter 1 under the tab labeled Readings, above. The password is the name of the building where we hold class.)
The chapter provides an overview of the issues we will be discussing in the next topic: The theory of the firm. Once you’ve read it, please email me the answers to the following questions by Tuesday night.
Study Questions for Harford:
1. Who makes the most profit on coffee shops around the London subway? Please explain why that is the case
2. What two factors make coffee shops profitable?
3. How much profit does “the marginal firm” earn? Why? Your answer should explain clearly what a marginal firm is.
4. Why are British teachers paid so little?
5. Why are British nurses paid so little?
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