Option 2: Consider a restaurant owner who has signed a one year lease for a building in Galveston. The lease requires a monthly rent of $2000. The owner also acquired a liquor license for one year for $7000. For simplicity assume these are the only fixed costs and these costs are sunk. The restaurants revenues are around $6000 for 6 months of the year (high season) and $1500 per month for the rest of the year (low season). Monthly variable costs are $3000 in the high season $2000 in the low season   (i) Would the firm find it optimal to remain open in the low season? Why or why not?   (ii) Would the firm want to exit this industry in the long run (after one year)? Explain.

PART 2 OPTION 2:

Part 2: Answer 2 of the following 3 questions. If you answer more than 2, only the first two will be graded.    

What innovation was made possible by the development of steel for a skeletal structure and the elevator?

Exposing treated silver plates to light and then fixing the images onto the plate with a mineral salt solution creates __________.

A sculpture created from found, discarded, or familiar objects is called __________. Nick Cave’s Sculpture is an example.

Greek artists provided lifelike qualities to human figures by using __________, positioning the figures weight on one foot causing the hip and shoulder to counter balance.

Which of the following is a type of relief printing?

What was the drawback to the camera obscura?

Which of the following demonstrates the influence of portrait painting on early photography?