Research Questions #4 (3 questions) Name: Alexis Lake 1) Using the economic principles of Optimization theory, comment on each of the following….. a) “The optimal number of traffic deaths in the US is zero” This would be focused on minimizing. Zero deaths is the ideal outcome, so that means no cars on the road, no traffic, but also less commerce. b) “Any pollution is too much pollution” This would also be focused on minimizing. Zero pollution is the ideal outcome. c) “we cannot pull US troops out of Afghanistan …we have committed so much already” This would be a sunk cost. The troops and the resources have already been sent or committed to fight in Afghanistan. This is letting the previous decisions or resources used impact decisions today. d) “Since the start up airline has experienced a 25% jump in insurance cost, the airline should increase the number of passengers it serves next quarter in order to spread the insurance cost increase over a larger number of passengers” The insurance costs would be a fixed cost. While this might be focused on maximizing profit, the airline should be focused on the optimal level of activity to make profit. Just selling more seats could have a diminishing return.