Q1.Two firms produce in a market with demand P=100-Q. The marginal cost for firm 1 is constant and equals 10. The marginal cost of firm 2 is also constant and it equals 25. Firm 1 sets output first. After observing firm 1's output, firm 2 sets its output. (Please pay attention. Read the brackets correctly.)

1a. For firm 2, the best response is R₂(q₁)=(A-q₁)/2. The value for A is?

1b. Solve for the Stackelberg equilibrium. The quantity sold by firm 1 is?

1c. Solve for the Stackelberg equilibrium. The quantity sold by firm 2 is?

1d. Consider the Stackelberg equilibrium you derived in 1b and 1c, (q_1S, q_2S). Consider the two firms' isoprofit curves passing through (q_1S, q_2S). The slope of firm 1's isoprofit curve, (dq₂/dq₁)|π₁ , at (q_1S, q_2S) is equal to?

[By definition, an isoprofit curve for firm 1 collects all pairs of (q₁,q₂) which give firm 1 the same profit level. c.f.: indifference curves for consumers. For example, π₁(10,10)=π₁(20,35)=700. The pairs (10,10) and (20,35) are on the same isoprofit curve. ]

1e. The slope of firm 1's isoprofit curve at the Cournot equilibrium (35,20) is equal to?

1f. Suppose now that entry requires fixed cost F=100. Find the limit output that firm 1 has to produce to deter entry. q_1L=?

1g. Given F=100, the profit maximising output for firm 1 is q_1*=?

2. Which of the following is not a characteristic of a long-run equilibrium for a firm in a monopolistically competitive industry?

Select one:

a. The firm maximises profits.

b. Price will be greater than marginal cost.

c. Average total cost will be minimised.

d. Price will equal to average total cost.

Use the quality maximization model to describe the role not-for-profit hospitals play in the diffusion of new medical technologies. Illustrate your answer on a graph.

. What was the "dominant" ethical theory that drove their decision to act as they did? How did you recognize that ethical theory was being used? Use examples from the case to justify

Consider the IS-LM and aggregate demand/aggregate supply model of Chapters 11 and 12. Consider a reduction in the level of taxes, starting from an initial situation in which output is equal to its natural level.

a) Depict the short-run effects of the reduction in T using 3 graphs: one for the market for goods and services, one for the IS-LM curves, and one for the Aggregate Demand and Supply curves. How do the new short-run equilibrium values of r, Y and P compare to the initial ones? (i.e., are they higher, lower or equal?)

b) Depict the transition from the short-run to the long run. To do this, draw 3 new graphs (with the same variables as before), in which the initial situation is the short-run equilibrium after the decrease in T. How do the long-run equilibrium values of r, Y and P after the shock in T compare to ones before that shock?

Note: be sure to label: i. the axes; ii. the curves; iii. the initial equilibrium values; iv. the direction the curves shift (including the initial adverse shock); and v. the terminal equilibrium values.

1. Suppose, a perfectly competitive firm is trying to determine its profit-maximizing level of output. The product sells for $260 per unit. The total cost function is given by C = 1000 + 80Q – 6Q2 + .2Q3. Find the equilibrium price and maximum profits. Also, find the shutdown point for this firm.

2. You are the manager of a monopolistically competitive firm, and your demand and Cost functions are given by Q = 20 – 2P and C = 104 – 14Q + Q2. a) Find the inverse demand function for your firm’s product. b) Determine the profit-maximizing level of output and price. c) Calculate the firm’s maximum profits. d) What long-run adjustments should you expect?

Chinese economy has grown at an average annual rate of close to 10 % in the past 40 years. Going forward, what are the challenges to maintaining high growth rates and what have been the government policy responses to those challenges – if any. Where do you see China going in the coming decades?

Robert has been asked by friends to join them at a protest rally against the World Trade Organization (WTO). Because he is taking International Business, he wants to use the facts he is learning to help make a decision. Three topics that especially concern Robert are poverty, human rights, and the environment. For each of these topies, prepare at least one argument for each side, that is, one pro and one con. In conclusion, give your own view of whether Robert should participate.

Country A has 100b$ trade deficit against Country B, and Country B has 200b$ trade surplus against Country C, and Country C has 150b$ trade surplus against Country A. Moreover, assume that Country B has a balanced trade with other countries (countries other than A and C), but Country A has 100b$ trade surplus against other countries (countries other than B and C) and Country C has 100b$ trade deficit against other countries (countries other than A and B). Then, Country B closed its border permanently due to the outbreak of corona virus and thus excluded from world financial and trade markets permanently. What happens to real world interest rate? How does this affect the real exchange rate and nominal exchange rate between Country A and Country C in long run? Assume that Country B is sufficiently large so it has a significant effect on world savings and investments, and further assume that the virus only affects Country B. Explain in detail by showing the changes in the relevant markets.

##################Raffi Balin's coffee importing company employs 120 people. Each week, the staff meet for breakfast, and discuss possible improvements. Each employee is encouraged to share, and is rewarded for good ideas. For example, one of the coffee roasters suggested that the firm import tea as well, because new health and lifestyle concerns are causing many consumers to reduce coffee consumption in favour of tea. A tea division was formed, and became successful (after a few false starts that helped everyone learn). The coffee roaster was put in charge of the new division and, as a result, saw her annual salary triple. Is Raffi's business an innovative organization? Explain?

A fast-food restaurant has identified three primary groups willing to purchase its meals. However, customers are willing to purchase only one meal each. The table shows the total number of meals bought at three different prices. The number of consumers is the total number of buyers at each price level.

The restaurant can produce a meal with no fixed costs and a constant marginal cost of $1 per unit.

1st attempt

Part 1   (2 points)

If the restaurant charges only one price for the meal, it will charge   $--- and receive a profit of   $ -----.

Part 2   (2 points)

Assume the firm can distinguish between customers and has the ability to charge different customers different prices. If the restaurant can perfectly price-discriminate, the highest price it will charge is   $ ----- . The total profits under perfect price discrimination are   $ ----- .

Part 3   (2 points)

Assume the firm can distinguish between customers and has the ability to charge different customers different prices. If the restaurant charges two prices, it will charge $-----and $-------.

and receive a profit of   $-------.

Using online shopping as an example to explain (eg Zalora, eBay)

A) A thorough, insightful description on different marketing communications tools
applied in its industry.
B) An integrative approach in formulating its marketing campaign
C) A conclusion of explaining how successful the IMC strategy is.

(1500 Words)

1. Consider the following three alternatives. Using incremental IRR analysis, determine which of these projects is the most desirable. Your MARR is 11%. Each of these projects (A&B) will last for eight years. (2 points)

Q5. A monopolist has the cost function C(Q) = m*Q +k*Q2 where m and k are parameters. It faces two types of consumers, A and B, with the following demand curves for its product: PA =60–3*QA PB =80–2*QB For (a)—(c) below, assume Assume m=30 and k=0.

(a) [4] What price will the monopolist charge under uniform pricing?

(b) [4] What prices will the monopolist charge if it can price discriminate?

(c) [4] How much higher is the monopolist’s profit in (b) than in (a)? Now, for part (d), assume m=30 and k=3.

(d) [10] What prices and quantities will the monopolist choose under price discrimination, and under uniform pricing?

If corporate downsizing and lack of job security cause consumers to spend less and save more, what will be the impact on the exchange rate and trade balance?

a. Use the basic version of the long-run model of a small open economy to illustrate graphically the impact of this decline in consumer confidence on the exchange rate and the trade balance. Assume the country starts from a position of trade balance, i.e., exports equal imports. Be sure to label:

i. the axes
ii. the curves
iii. the initial equilibrium values
iv. the direction the curves shift
v. the new long-run equilibrium values.

b. Based on your graphical analysis, explain the predicted impact of a decline in consumer confidence on the exchange rate and the domestic economy's trade balance.