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Slide 18: You have a firm that makes pizza. Minimum wage is $10 and the wage budget per hour is $50 total. The government raises minimum wage to $15 per hour and your Wage budget remains unchanged. On a graph show what happens to the demand for labor. Next on a supply and demand curve show what happens to your products price and output. (2 graphs) Slide 19: Your firm would like to buy a new pizza oven. Your revenue studies show that over the next five years the new oven will bring about 1000 additional pizzas produced and a 6% increase in revenue per year. The bank is offering a 4% interest rate. 1. Describe why you should or should not take the loan. What will be your return in % per year if you take the loan and pay the bank back? 2. Show in a supply and demand graph what happens when you take the loan and increase your pizza production. (1 Graph) Slide 20: You run a meat production factory. In the course of your production of sausage there is a noticeable smell that lingers in the surrounding neighborhood. 1. What is this an example of? What are possible ways the government can regulate your production? 2. Ina graph show the price and output if your business in unregulated then show the price and output after the government imposes a regulation. (1 graph)

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