Melissa Faraj owns a lot and wants to build a house according to a particular set of plans and specifications. She solicits bids from building contractors and receives a bid from Siegel for $153,000.00 which she accepts. One month after beginning construction of the house, Siegel contacts Faraj and tells her that because of inflation and a recent price. Hike for materials, his costs have gone up. He says he will not finish the house unless Faraj agrees to pay an extra $13,000.00. Faraj reluctantly agrees to pay the additional sum. However, after the house is completed, she refuses to pay the extra $13,000.00. Is Farja legally required to pay this additional amount

Evelyn would like to open a small business that is categorized as a being in the distribution industry. to do this she could open a establishment.

Suppose a firm faces a fixed price of output, 푝푝= 1200. the firm hires workers from a union at a daily wage, 푤푤, to produce output according to the production function 푞푞= 2퐸퐸12. there are 225 workers in the union. any union worker who does not work for this firm is guaranteed to find nonunion employment at a wage of $96 per day. a. what is the firm’s labor demand function? b. if the firm is allowed to choose 푤푤, but then the union decides how many workers to provide (up to 225) at that wage, what wage will the firm set? how many workers will the union provide? what is the firm’s output and profit? what is the total income of the 225 union workers? c. now suppose that the union sets the wage, but the firm decides how many workers to hire at that wage (up to 225). what wage will the union set to maximize the total income of all 225 workers? how many workers will the firm hire? what is the firm’s output and profit? what is the total income of the 225 union workers? [hint: to maximize total income of union, take the first order condition with respect to w and set equal to 0.]

What do you think: would it be more profitable to own 200 shares of penny’s pickles or 1 share of exxon? why do you think that?