An Economically Rational Bank
The Lead Zeppelin Company has decided that it will produce at least 1 dirigible. Now the question becomes, How many more dirigibles should it produce to make as much profit as possible?Use the profit-maximizing rule to explain how many dirigibles the Lead Zeppelin Company should produce to maximize its weekly profit. Your answer should include a statement of the profit-maximizing rule and the calculations that apply it. To receive any credit on this question, you must use the profit-maximizing rule. To receive full credit on this question, you must show all of your work in the calculations.5. People who commit bank robberies must make the decision to rob banks. That decision comes with a built-in dilemma: every minute a robber stays in the bank increases the amount of money the robber will get, but every minute in the bank also increases the likelihood that the robber will get caught.A study of more than 5000 bank robberies between 2005 and 2007 found that the average bank robbery lasted 4 minutes and 16 seconds and yielded about $20,000. The study also found that each additional minute that robbers spent in the bank increased their haul by about $2,000.Explain how an economically rational bank robber should determine how many minutes to spend in the bank committing the robbery. Be sure to explain the principle that a rational bank robber would apply to this decision, and how that principle would be applied.6. Your company has invested $5 million in developing a new product, but the development process isnt quite complete. You have just learned from your marketing team that other companies have introduced similar products. As a result of this competition, the expected sales of your new product once you have completed development and actually begun production is now just $3 million. Your production team tells you that it will cost another $1 million to finish development and make your product. The decision is now yours: should you give the go-ahead to complete development of the product? Why or why not? In the event that your production teams cost estimate is inaccurate, what is the most that your company should pay to complete development? Why? Be sure to incorporate (and define) the relevant concept into your answer
