Economics 102 Assignment #1 (15 Points) Name
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SHOW ALL CALCULATIONSQuantity Total Revenue Marginal Revenue Marginal Cost 10,000 $1.20 40,000 .40 90,000 .24 130,000 .30 160,000 .40 180,000 .60 192,000 1.00 198,000 2.00 200,000 6.00 Continued on Page 27 2. On a graph below, re-draw the average total cost and the marginal cost as they were drawn for Assignment #5. Then, draw the marginal revenue. Show on the graph the profit-maximizing quantity as well as the economic profits or losses. Show the actual numbers from question 1. $ 
0 Quantity of Oranges 3. Now assume that the price of oranges falls to $0.40 per pound. Using the principles described in the reading, the profit-maximizing quantity is __________________ and the economic profit is $________________________
10,000 $1.20 40,000 .40 90,000 .24 130,000 .30 160,000 .40 180,000 .60 192,000 1.00 198,000 2.00 200,000 6.00 4. Use the principles of Chapter 16 to answer the following question: since the company is making an economic loss, should it continue to produce in the short-run or should it shut down? Explain why. Continued on Page 28 5. Now assume that the company sells its product in perfect competition at a market price of $0.30 per pound. Using the principles described in the reading, the profit-maximizing quantity is __________________ and the economic profit is $________________________ Quantity Total Revenue Marginal Revenue Marginal Cost 10,000 $1.20 40,000 .40 90,000 .24 130,000 .30 160,000 .40 180,000 .60 192,000 1.00 198,000 2.00 200,000 6.00 6. Use the principles of Chapter 16 to answer the following question: since the company is making an economic loss, should it continue to produce in the short-run or should it shut down? 7. Fill in the following table. Assume there are 1,000 orange groves and that they are identical. Remember that at some point, the seller will shut-down in the short-run. Price Supply of One Grove Industry Supply Quantity Demanded $0.30 200,000,000 $0.40 190,000,000 $0.60 180,000,000 $1.00 170,000,000 $2.00 120,000,000 $6.00 80,000,000
Economics 102 Assignment #7 (20 Points) Name___________________ Part 1: 5 Points 1. Return to the case of the orange grove from the homework to previous chapters. Assume that all groves sell their oranges through one cooperative. This cooperative acts as a pure monopoly. Assume that, at a price of $1.50 per pound, the monopoly cooperative will sell 10,000 pounds of oranges. Every time the price is lowered by 5 cents per pound, another 10,000 pounds will be sold. This is shown below. Fill in the table. The average total cost and the marginal cost are repeated from the previous homework assignments. (Remember that the marginal revenue is calculated as the change in total revenue divided by the change in quantity.) Quantity Price Total Revenue Marginal Revenue Average Total Cost Marginal Cost 10,000 $1.50 $4.80 $1.20 20,000 1.45 30,000 1.40 40,000 1.35 1.50 0.40 50,000 1.30 60,000 1.25 70,000 1.20 80,000 1.15 90,000 1.10 0.80 0.24 100,000 1.05 110,000 1.00 120,000 0.95 130,000 0.90 0.65 0.30 140,000 0.85 150,000 0.80 160,000 0.75 0.60 0.40 170,000 0.70 180,000 0.65 0.60 0.60 190,000 0.60 200,000 0.55 0.72 6.00 The quantity that the monopolist will choose in order to maximize profits is _______. Explain the reason that this quantity will be produced. The price that this monopolist will charge is $______________________. The economic profits that this monopolist will earn will equal $_________________. Show calculations. Continued on Page 30 2. You were given the following demand curve facing a monopolist in Chapter 18. Price Quantity Total Revenue Marginal Revenue Marginal Cost $340,000 0 320,000 1,000 $160,000 300,000 2,000 140,000 280,000 3,000 120,000 260,000 4,000 140,000 240,000 5,000 160,000 220,000 6,000 180,000 200,000 7,000 200,000 180,000 8,000 220,000 160,000 9,000 240,000 140,000 10,000 260,000 120,000 11,000 280,000 You calculated that the quantity the monopolist will produce is 5,000. The price that will be charged is $240,000. And the economic profits that will be earned are $300,000,000. Now assume that the government puts a price ceiling on makers of houses. The price cannot be more than $200,000. Recalculate the decision of the monopolist under these conditions. Hint: every time there is a number above $200,000 under Price, change the number to $200,000. Every number below $200,000, do not change. Recalculate the total revenue and the marginal revenue. In calculating the marginal revenue, remember to divide by the change in quantity (1,000). The quantity produced will occur where the new marginal revenue equals the marginal cost. The new quantity produced is ______________. The new price charged is $_________________. The new economic profits earned are equal to $__________________. What can you conclude about price ceilings if there is monopoly? Continued on Page 31 Part 2: 5 Points 2. In the graph below, draw the situation for the monopolist as you did originally. Show the profit-maximizing quantity and price as well as the economic profits. Then, there is an increase in the demand for the product. Show the results of this change on the graph. Show the new profit-maximizing quantity, price, and economic profits. $ ___________________________________________ 0 Quantity
the price has ______________, and the economic profits have ________________ . (Answer “risen”, “fallen”, or “remained unchanged”)
“Richard Sarkis and David Kinsley were juniors at Williams College, surfing the Internet for a cheap source for their Economics textbook, when they discovered a little known economic fact: The very same college textbooks used in the United States sell for half price, in England. Like prescription drugs, textbooks cost far less over seas than in the United States. The publishing industry defends its pricing policies, saying that foreign sales would be impossible if book prices were not pegged to local market conditions. ….. Thanks to the Internet, more students and college bookstores are starting to order textbooks from abroad – and a few entrepreneurs have begun what is essentially an arbitrage business to exploit the price differentials. … Kinsley and a classmate spent three years building a web-based company, BookCentral.com, selling textbooks from abroad to American students. … A 1998 Supreme Court ruling stated that copyright law does not protect U.S. manufacturers from having the products they arranged to sell overseas at a discount shipped back to the United States for sale. .. At one campus, a student who asked not to be identified imported 30 Biology textbooks this fall and sold then outside his classroom for less than the campus bookstore price, netting a $1,200 profit. None of the three major textbook publishers (Pearson, McGraw Hill, and Thomson) would discuss why overseas prices are so much lower than domestic ones. Use the principles of price discrimination to explain why the prices of the same textbooks are lower overseas. Then, explain what effect Internet sales are likely to have on the ability of the publishers to price discriminate.
3. California is now often cited as an example of “how not to do deregulation”. Read the section in Chapter 19 on the deregulation of electricity in California. Then, write a short essay describing to someone unfamiliar with Economics exactly what went wrong with California’s deregulation. Part 4: 5 Points In the chapter, the history of the personal computer industry is developed as an example of monopolistic competition. In the graph below, depict the history of IBM as related in the chapter. Assume that the personal computer industry is monopolistic competition. The graph below shows the situation as of 1980. It assumes that the company is in long-run equilibrium, with economic profits of zero. Go through the chapter and show on the graph all of the events that relate to IBM. Consider the decision to enter the personal computer industry, the entry of the “clones”, the development of the OS/2, the development of Microsoft Windows, and the alliances with Apple. In each case, explain why you made the changes that you did and also what resulted for the company. (You may need to redraw the graph so that your graph does not become too crowded! So several graphs are given on Pages 33 and 34.) Continued on Page 33  Marginal Cost
$   Average Total Cost
P Demand1980 Marginal Revenue1980 0 Q1980 Quantity Explanation: Marginal Cost
$ Average Total Cost
P Demand1980 Marginal Revenue1980 0 Q1980 Quantity Explanation: Marginal Cost
$ Average Total Cost
P Demand1980 Marginal Revenue1980 0 Q1980 Quantity Explanation: Marginal Cost
$ Average Total Cost
P Demand1980 Marginal Revenue1980 0 Q1980 Quantity Explanation: End of Assignment 7 Economics 102 Assignment #8 (20 Points) Name________________________ Part 1: 5 Points 1. In Chapter 14, you were given homework concerning an orange grove. The following table described the relation between the number of pounds of oranges sold per year and the number of workers hired. This was the production function. You were asked to calculate the marginal physical product (MPP). Refer back to that homework. Number of Workers Number of Pounds Per Year 0 0
1 10,000 2 40,000
3 90,000 4 130,000 5 160,000 6 180,000 7 192,000 8 198,000 9 200,000 10 200,000 11 190,000
1 $0.60 $12,000 2 $0.60 $12,000 3 $0.60 $12,000 4 $0.60 $12,000 5 $0.60 $12,000 6 $0.60 $12,000 7 $0.60 $12,000 8 $0.60 $12,000 9 $0.60 $12,000 10 $0.60 $12,000 11 $0.60 $12,000 This company will hire _________ workers because_____________________________. (Compare this to the number hired in the homework in Chapter 14.) Continued on Page 36 2. In the early 1990s, comparable worth was an important political issue. This meant that workers should not only be paid the same wage for doing the same job, they should be paid the same wage if they did comparable jobs. The courts found that jobs done by men and women were often comparable (as they measured this) but that the wages were commonly higher for jobs done by men. Had comparable worth become national law, the effect would have been to significantly raise the wages paid to women who work. Analyze this case. What would be the results of passing comparable worth laws? In doing your analysis, notice that this case is similar to the case of the increase in the minimum wage.
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____________________________ _________________________________ 0 Labor 0 Labor One Employer All Employers Short-run: Long-run: Continued on Page 37 Part 3: 5 Points 1. In the reading for this section, the rising labor force participation rate for married women was explained. There has also been a significant increase in the labor force participation rate of young people --- ages 16 to 22 --- especially those still attending school. Use the explanations developed in this section to provide some explanations of this increase. In your answer, be sure to consider both the substitution effect and the income effect. 2. The following are the ratios of incomes. Year Black Males to Black Females to Hispanic Males Hispanic Females White Males White Females to White Males to White Females 1955 60.9% 51.4% 1960 66.1% 67.8% 1965 62.8% 67.9% 1970 68.1% 81.9% 1975 73.2% 95.5% 71.2% 85.0% 1980 70.4% 93.3% 70.0% 84.5% 1985 70.0% 88.5% 67.5% 82.0% 1990 71.4% 88.9% 64.0% 77.7%
Continued on Page 38 Part 4: 5 Points 1. Using the data provided in Chapter 25, draw the Lorenz Curves for the years 2000, the year 1990, the year 1980, and the year 1970. Did the United States become more equal or unequal in the decade of the 1970s? Did the United States become more equal or unequal in the decade of the 1980s? Did the United States become more equal or unequal in the decade of the 1990s? Cumulative Percent Of Income 
Percent of Households 2. A. Read the description of the creation of the great fortunes in the text. In magazines, books, or on the internet, find the story of a billionaire who is not mentioned in the text. You may use one who is currently alive or an historical person. Write a brief description of the source of this person’s great wealth. (If the wealth was inherited, go back to discover the original source of the wealth.)
Labor Hours Required: 1 Bottle of Wine 15 hours 10 hours 1 Kilogram of Cheese 10 hours 4 hours 1. First, in the space below, draw the production possibilities curve for Vineland, assuming that there are 30 million hours of labor time available per year. Remember that the production possibilities curve shows all possible combinations of goods that can be produced. If all of the hours are devoted to wine, Vineland can produce _____ bottles of wine. If all of the hours are devoted to cheese, Vineland can produce _____ kilograms of cheese. If 15 million hours were devoted to wine and 15 million hours to cheese, Vineland can produce ____ bottles of wine and ____ kilograms of cheese. Show these on the graph below. Show the production possibilities curve as a solid line. Quantity of Wine 
Quantity of Cheese 2. Second, in Vineland, each hour devoted to producing wine requires the sacrifice of ___ kilograms of cheese. This is the opportunity cost. In Cheeseheadland, each hour devoted to wine requires the sacrifice of ___ kilograms of cheese. This is the opportunity cost. Vineland has the absolute advantage in ______________. Cheeseheadland has the absolute advantage in _______________. (Choose wine, cheese, both, or neither). Vineland has the comparative advantage in ______________. Cheeseheadland has the comparative advantage in _______________. (Choose wine, cheese, both, or neither). Vineland should export _____________ goods and it should import _______________ goods. Continued on Page 40 Third, imagine that Vineland specializes completely in wine. All 30 million hours were used to produce wine. Vineland then trades 1 million bottles of wine to Cheeseheadland. In return, it gets back _____ kilograms of cheese from Cheeseheadland. Is Rest of the World better-off with trade? Why? _____________________________ _____________________________________________________________________ Finally, show the production possibilities curve with trade on the graph on Page 39. Then, show the new production possibilities curve as a dashed line. Part 2: 5 Points: 1. In Chapter 27, the text refers to a paradox. On the one hand, since the end of World War II, the government of the United States has been the leading proponent of free trade around the world. Many actions have been taken by the American government to promote free trade. Yet, on the other hand, the American government has imposed trade restrictions on Japanese steel, Japanese automobiles, textiles, agricultural products, etc. The American government has also subsidized certain companies, such as Boeing, to aid them in international competition. How do you explain this paradox? (You may want to review the section on Public Choice before answering.) Ethics Question: 2. a. In November, 1999, the World Trade Organization (WTO) met in Seattle. There were about 50,000 protesters there. There was destruction and some arrests. What exactly does the World Trade Organization (WTO) do? Give some examples of some cases it has been involved with. (Look up the World Trade Organization on the Internet in order to answer.) b. You will be assigned one of the following groups who opposed the World Trade Organization (WTO). Explain the reasons that the group opposes the WTO. How does it want the WTO to change? You will get the information you need from the Internet or from newspaper accounts. The AFL – CIO or any particular labor union OR Any Environmental group who opposed the WTO, such as the Sierra Club OR Any other political group who opposed the WTO. c. Present arguments made by people in support of the World Trade Organization (WTO). Who are the people supporting the WTO? What arguments do they make that it has been good for the world economy? You will get the information you need from the Internet or from newspaper accounts. End of Assignment 9 Directory: users -> llee users -> Guide to Geography. Jan 4 2006 users -> U. S. National Hurricane Center: most tropical storms: There were 26 tropical storms in 2005 (so far) users -> M. L. Stapleton, Spenser’s Ovidian Poetics users -> Jessy Van Horn Experimental and Methods users -> Updated: 6 October 2009 users -> Early Middle Ages users -> Using gis to Assess the Symmetry of Tropical Cyclone Rain Shields users -> Last Name: Skourlas First Name: Christos Marital Status: Married Work Address llee -> Chapter 7: The European Union (latest revision 2009) Development of the European Union llee -> Chapter 12 The Communist Economy of the Former Soviet Union Download 210.09 Kb. Share with your friends:
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