1. At a management luncheon, two managers were overeat arguing about the following statement "A manager must never hire another worker if new person diminishing returns". Is this statement correct? If so, why? If not, discuss why not?

2. Engineers at a national research laboratory built a prototype automobile that could be driven 180 miles on a single gallon of unleaded gasoline. They estimated that in mas production the car would cost $40,000 per unit to build. The engineers argued that Congress should force U.S. automakers to build his energy-efficient car.

a. Is energy efficiency the same thing as economic efficiency? explain.

b. Under what circumstances would the energy-efficient automobile described here be economically efficient?

c. If the goal of society is to get the most benefit from its limited resources, they why not ignore economic efficiency and build the energy-saving automobile?