1.A car rental company currently has seven cars in its fleet, and its total daily cost is $2,300. If the company added an 8th car, its daily cost would be $2,400, or $300 per car. Adding the 8th car...

1.A car rental company currently has seven cars in its fleet, and its total daily cost is $2,300. If the company added an 8th car, its daily cost would be $2,400, or $300 per car. Adding the 8th car will increase the daily total revenue by $200. Should the company add the 8th car? __________ (Yes/No)

2. In Figure 2.3 on page 63, suppose the marginal cost of movies is constant at $125 million. Is it sensible to produce the third movie? __________ (Yes/No)

3. Suppose that stricter emissions standards would reduce health-care costs by $50 million but increase the costs of fuel and emissions equipment by $30 million. Is it sensible to tighten the emissions standards? __________ (Yes/No)

4. Arrows up or down: The decision about how fast to sail a cargo ship is based on the __________ benefit and the __________ cost. (Related to Application 2 on page 65.)