This module has focused on different business costs. For this week’s paper, go to your local grocery store and price the ingredients for baking chocolate chip cookies. For simplicity, assume the ingredients for three dozen cookies are: One 16 oz. box of sugar = $0.62 One 12 oz. bag of chocolate chips = $2.89 One 2 lb. bag of flour = $0.99 One dozen eggs = $1.39 A fixed cost of $30 to rent a kitchen with an oven for a day Assume in an hour you can bake two dozen cookies and that the cost of your time is $10 an hour.

Calculate the average total cost, average variable cost, average fixed cost, and marginal cost for baking one dozen, two dozen, three dozen, four dozen, five dozen, six dozen, seven dozen, eight dozen, nine dozen, and ten dozen cookies.

Show your work for the calculations and create a table with just cost numbers. Create the graphs for each of the cost numbers. Graph them on the same graph. Recalculate the costs assuming the cost to rent the kitchen with an oven dropped to $15. Compare the new calculations with the old calculations.

Draw a diagram to show the long run equilibrium condtion of the perfectly competitive firm

1. Suppose there are only two firms serving your market with the high-speed Internet access. Market demand is estimated to be P = 40 – 5(Q₁ + Q₂). Each firm’s marginal cost is $20.
   1. Suppose each firm maximizes its own profit, treating the other’s quantity as constant. Find an expression for firm 1’s optimal output as it depends on firm 2’s. In equilibrium, what common levels of output will each firm supply?

b. Suppose the two firms decide to collude in setting their outputs. What outputs should they set and why?

1. What are the important characteristics of perfectly competitive markets?

2. Give me 5 examples of perfectly competitive markets.

3. Why do you think economist really like to talk about competitive markets?

4. What does the concept of low or no barriers to entry mean? Why is it so important to understand barriers to entry?

5. Give me 5 examples of price takers in perfectly competitive markets.

1) What is the debt limit and why do we have one?

2) Does raising the debt limit allow the government to spend more money?

3) What happens when the Treasury hits the debt ceiling?

4) Why is raising the debt ceiling so controversial?

5) What happens if congress doesn't act?

6) What are the dangers of rising national debt?

7) Has the debt ceiling ever been reduced?

8) Should Congress keep expanding the debt ceiling? Why/why not?

Draw Draw a three-graph figure similar to Figure 9.4 in chapter 9 notes and explain the effects of a Chinese tariff on U.S. exports of soybeans to China. Assume that the United States and China are large countries. Do a welfare analysis and explain the effects of the tariff in the U.S. soybean market, do a welfare analysis and explain the effects of tariff in the Chinese market, and explain the effects of the tariff in the international market. Explain the costs and benefits of the tariff in the United States and in China. Make sure to discuss the appropriate details. You can draw the graphs by hand and paste them here.

1. Explain marginal utility and diminishing marginal utility. Provide an example of each concept.

2. Explain the income effect and the substitution effect.

3. Provide me with one example of the endowment effect.

4. Explain economic profit and how it is “better” than accounting profit.

5. Provide me 3 examples of sunken costs.

6. Explain how American farmers have utilized the concept of economies of scale to increase profits.

Answer the following questions. Assume other inputs other than labor are fixed in the short run.

1. Compute the average and marginal product and put the values in the table below.

   # workers	Repairs	AP	MP
   0	0
   1	10
   2	21
   3	33
   4	43
   5	52
   6	60
   7	67
   8	73
   9	78

2. Over what range of labor output are there increasing returns to labor? Diminishing returns to labor? Negative returns?
3. Over what range of product is marginal product greater than average product? What is happening to average product as employment increases over this range?
4. Over what range of labor input is marginal product smaller than the average product? What is happening to the average product as employment increases over this range?

Consider a bargaining problem with two agents 1 and 2. There is a prize of $1 to be divided. Each agent has a common discount factor 0 < δ < 1. There are two periods, i.e., t ∈ {0, 1}. This is a two period but random symmetric bargaining model. At any date t ∈ {0, 1} we toss a fair coin. If it comes out “Head” ( with probability p = 1 2 ) player 1 is selected. If it comes out “Tail”, (again with probability 1 −p = 1 2 ), player 2 is selected. The selected player makes an offer (x, y) where x, y ≥ 0 and x + y ≤ 1. After observing the offer, the other player can either accept or reject the offer. If the offer is accepted the game ends yielding payoffs (δ tx, δt y). If the offer is rejected there are two possibilities:

• if t = 0, then the game moves to period t = 1, when the same procedure is repeated.

• if t = 1, the game ends and the pay-off vector (0, 0) realizes, i.e., each player gets 0.

(a) Suppose that there is only one period,i.e., t = 0. Compute the Subgame perfect Equilibrium (SPE). What is the expected utility of each player before the coin toss, given that they will play the SPE.

(b) Suppose now there are two periods i.e., t = 0, 1. Compute the Subgame perfect Equilibrium (SPE). What is the expected utility of each player before the first coin toss, given that they will play the SPE.

construct a table listing the potential effects of inward foreign direct investment on developing countries. In one column, list the possible benefits of FDI, in a second column, list the possible negative effects FDI can bring. Some of these effects may be political, others economic, social, or environmental. Briefly explain each potential benefit and each potential cost. full and explain

8. Draw the goods market. Illustrate and explain how the market equilibrium would change under the following circumstances:

a. The U.S. dollar gained value compared to foreign currencies.

b. American corporations have become leaner which means that productivity in the U.S. has increased. Hint: How are prices in the U.S. affected, relative to foreign prices?

c. There is a decrease in transfer payments (ie, items like spending on social programs).

6. Suppose that the following information is given (Yd is disposable income):

C= 100 + (.75)(Y-T) G= 250

I= 150 t= 20% M= .15Yd

a) What would be the effect on output of a $50 increase in government spending? Show your work.

b) What if the marginal propensity to import was to increase. What would be the effect on output? Describe why it would affect economic activity.

c) What would be the effect on the equilibrium level of output if the tax rate were to increase? Explain and draw a graph of the goods market.

I need to know about specific monetary policies in place in the beginning of the 1980s. The instructor told us to remember that the Federal Reserve controls our monetary policy and they have a four main goals: 1. Price Stability 2. High Employment 3. Economic Growth 4. Financial Market Stability. So I need to know specific monetary policies used in that time period and what the goals were of those policies. (I need at least two policies). I already know that the main tools the Fed uses are the decreasing or increasing of the money supply (through open market operations, changing the required-reserve ratio, and changing the discount rate) and changes to interest rates. This is for a macroeconomics class if that helps.