1. The basic economic tradeoff in a queueing system is between the cost of providing service and the cost of waiting. The more resources are allocated to providing service, the less time customers will have to wait, but the higher the cost of providing service. Conversely, the more resources are allocated to reducing waiting time, the less time customers will spend waiting, but the higher the cost of providing service. The goal is to find the optimal balance between these two costs, which will depend on factors such as the cost of resources, the cost of waiting, and the level of demand for service.
2. A real physical situation that exemplifies an M/M/k/k queueing system is a call center with a fixed number of service representatives. A customer who calls the center enters the queue and waits until a representative becomes available to handle their call. The arrival rate of customers and the rate at which representatives can handle calls are both random variables that follow a Poisson distribution. The queueing system can be modeled as M/M/k/k, where "M" stands for Markovian, meaning that the arrival and service rates are exponentially distributed, and "k" is the number of servers available to handle calls. In this system, the arrival rate of calls is λ, the average service rate of each representative is μ, and there are k servers available to handle calls. The goal is to minimize the number of customers waiting in the queue while keeping the number of representatives and the cost of providing service within acceptable limits.