Question 1: Southwest airline is known for advertising that it does not charge for passenger bags.  Does this represent producer-producer rivalry, consumer to consumer rivalry, or consumer to producer rivalry? Explain.

Question 2: You are the manager of a midsize company that assembles personal computers.  You purchase most components in a competitive market.  Based on your research customers that make more than $80K per year are more likely to buy 1.5 more components for their PC.  You pick up the Wall Street Journal that states that component parts for PCS are expected to rise, which will cause the price of component parts to increase. Based on this what can you expect will happen to the components you sell? Explain.

Question 3: Explain in detail why a "but one, get one free" deal is not the same as a "half-price" sale.

Question 4: You are a manager at Zappos and responsible for shipping and receiving.  You have 17 workers who package goods and 6 who record and notate the inventory as it gets taken from the shelves and ships.  You pay the employees who package the material $7.25 per hour, the minimum wage in your state, and the other workers $9.75 per hour.  Minimum wage is going to increase on September 1 to $8.15 per hour.  Discuss the implications of this legislative change on you operations.  Specifically discuss the implications for your optimal mix of inputs and long-run investment decisions.