HARVARD UNIVERSITY

                     DEPARTMENT OF ECONOMICS

ECONOMICS 10b SPRING 2015

                             Problem Set #2

                  (due IN SECTION Friday, February 20th)

1. Sage's Snowboarding Academy has enough financial capital in the form of

   retained earnings to undertake any or all of the following projects:

   i. Buying a lift machine that will last 3 years and produce 3000 worth of

       services the first year, 2000 the second year, and 1000 the third year.

   ii. Developing and building a robot lift operator that will last 5 years and

       produce 5000 worth of services each year.

   iii. Building a new restaurant that...