| Line 163: |
Line 163: |
| | ==Assignment== | | ==Assignment== |
| | | | |
| − | Review the topics that gave you difficulty on the exam. Then read, and reread, the above lecture. Then answer the problems below, which use many concepts from the entire course.
| + | Read, and reread as needed, the above lecture. Then answer the problems below, which use many concepts from the entire course. |
| − | | |
| − | ===Introductory===
| |
| | | | |
| | 1. A ________________ is one and only one buyer in a market. | | 1. A ________________ is one and only one buyer in a market. |
| | | | |
| | 2. Why do you think an economics course spends so much studying monopolies and monopsonies? | | 2. Why do you think an economics course spends so much studying monopolies and monopsonies? |
| − |
| |
| − | ===Intermediate===
| |
| | | | |
| | 3. What is the marginal factor cost of a monopsony when it increases is wage for 10 employees from $11 to $12 in hiring an 11th employee? Show your work. | | 3. What is the marginal factor cost of a monopsony when it increases is wage for 10 employees from $11 to $12 in hiring an 11th employee? Show your work. |
| Line 183: |
Line 179: |
| | 7. Sharon has to pay $10.50 to hire nine workers, and must increase the wage to $11 to hire a tenth worker. But the tenth worker will bring in $13 extra to the firm’s revenue. Does Sharon hire the tenth worker? | | 7. Sharon has to pay $10.50 to hire nine workers, and must increase the wage to $11 to hire a tenth worker. But the tenth worker will bring in $13 extra to the firm’s revenue. Does Sharon hire the tenth worker? |
| | | | |
| − | ===Honors=== | + | [[Image:Econ13ab.jpg|right|250px|thumb|Figures A and B]] |
| | + | |
| | + | 4. Look at Figure B (right). If the price of sale falls below P1 then the firm in the short run will (a) increase Q, (b) increase labor, (c) increase price, or (d) shut down. How much profit is it making at a price of P2? |
| | + | |
| | + | 5. Look again at Figure B (right). Assume the firm is perfectly competitive. Explain what AFC is, and use the labels on the graph to describe its amount. |
| | + | |
| | + | 6. Now turn to Figure A (right). What is the opportunity cost of shifting production from B to C? |
| | + | |
| | + | 7. Suppose that is your firm in Figure A (attached). What changes might enable you to move production to point D? |
| | + | |
| | + | ===Honors:=== |
| | + | |
| | + | [[Image:Econ13c.jpg|right|250px|thumb|Figure C]] |
| | | | |
| − | 8. “Marginal revenue product” is the change in total revenue resulting from a unit change in the quantity of a variable unit employed. Now redo and explain this question from the exam: “Factor of production” is any input (e.g., land, labor and capital) used to produce output. A monopolist will continue to purchase a particular factor of production until:
| + | 10. Look at Figure C (right). Assuming it represents the long run, describe what type of industry this is (e.g., monopoly, oligopoly, monopolistic competition, or perfect competition). Explain your answer. |
| − | (a) average factor cost equals average revenue product
| |
| − | (b) marginal factor cost equals marginal revenue
| |
| − | (c) marginal factor cost equals marginal revenue product
| |
| − | (d) average factor cost equals marginal favor cost
| |
| | | | |
| | 9. If our class is a monopsony with respect to hiring a dinner speaker for a special homeschool dinner we might hold, can we set the fee at whatever we like? If not, why not? | | 9. If our class is a monopsony with respect to hiring a dinner speaker for a special homeschool dinner we might hold, can we set the fee at whatever we like? If not, why not? |