1. Twenty first century electronics has discovered a theft problem at its warehouse and has decided to hire security guards. The firm wants to hire the optimal number of security guards. The following table shows how the number of security guards affects the number of radios 
   stolen per week. 
   Number of security guards 0 1 2 3 4 5
   Number of radios stolen per week 50 30 20 14 8 6
   a) If each security guard is paid $200 a week and the cost of a stolen radio is $25, how many security guards should the firm hire?
   b) If the cost of a stolen radio is $25, what is the most the firm would be willing to pay to hire the first security guard?
   c) If each security guard is paid $200 a week and the cost of a stolen radio is $50, how many  security guards should the firm hire?

1.) John and Judy are the only two residents in a neighborhood, and they would like to hire a security guard. The value of a security guard is $60 per month to John and $180 per month to Judy. Irrespective of who pays the guard, the guard will protect the entire neighborhood.

a. What is the most a guard can charge per month and still be assured of being hired by at least one of them? Who would that be?

b. Suppose the competitive wage for a security guard is $140 per month. The local government proposes a plan whereby John and Judy each pay 50 percent of this monthly fee, and asks them to vote on this plan. Will the plan be voted in? Would economic surplus be higher if the neighborhood had a guard? Briefly explain.

You are the owner of a temporary employment agency specializing in providing night security guards to local businesses. One of your recent placements was caught last night stealing property at his job site. The owner of the job site plans to sue you for "negligent hiring." What did that owner reasonably expect from your business and what evidence do you hope you have that will get you out of this unfortunate predicament? Assuming you do extricate yourself from the legal problems, how will you salvage your company's reputation?

Discuss the immediate effects of the following events on demand or supply in each respective market. Assume each market is perfectly competitive. Indicate if you think demand or supply will shift right or left. Discuss how any shift in demand or supply will affect the market price.
If you believe the events will cause a shift in either the demand or supply schedule, indicate which variable caused the shift in demand or supply.

Market Event
a. Airline Security guards Terrorist attack on the U.S.

b. Wal -Mart stock The company expects profits to decrease in the future.

c. Yen Japanese products become more attractive.

d. Used Cars Major manufacturers introduce zero per cent financing on new cars