Question

1- Post an experience you or someone you know had with counterfeits and how this experience affected your thoughts on counterfeiting. At least a paragraph.

2- Imagine that you were setting up a small lemonade stand. There are lots of others in the neighborhood. How would you determine both your costs of production and what price to charge?

(Hints: (1) Remember the profit maximizing steps discussed in the text; (2) Be sure to distinguish between fixed and variable costs.(3) This is a perfect competition discussion; all lemonade is identical.)

3- Consider this decision scenario related to your studies on whether or not FIT should run a class. (All numbers made up.) Relevant information and assumptions are:

For each student FIT receives $300 in tuition per class and another $300 in state aid, $600 altogether.

We are considering whether to let a night class in Labor Economics run.

We are assuming that we are using an adjunct (part-time) instructor that we pay $2,000 to teach the class.

We are assuming that if the class doesn't run, we'll lose all the students, that they'll go to another college to take the class or will just do something else with their time. Also, that this class doesn't have an effect on whether or not they take other classes at FIT.

In order for a class to cover all of the fixed (things like the Dean's and President's salaries and the building and insurance that you will have to pay whether or not you run the class) and variable costs associated with it (variable costs are mainly the instructor who you will have to pay if you run the class and won't have to pay if you don't) it needs to generate $9,000 with an enrollment of 15 students.

10 students sign up for the class

Discussion question.... Do you run the class or cancel it? Why or why not using concepts from this chapter? Be specific.

Answer 1

1. I once bought a pair of Nike shoes from an Indian local market in my last trip to India. The shoes looked nice and original. So, I bought it and the price seemed like a great bargain. However, after using it only two-three weeks, the shoes started being damaged with Nike logo coming out and signs of rupture in various locations. Clearly, it was a counterfeit product. I felt cheated and angered. I thought it was grossly wrong to imitate products of other brands and then sell those to unsuspecting customers. It imposed huge costs on the companies the product of which is being imitated as well as to the consumers who are buying these products. Therefore, I feel counterfeiting is a very unethical practice which must be stopped using appropriate mechanism and action.