The demand function for some product is given by Q = 100-10p. It costs $1 to produce one unit of this good and fixed costs of production are zero.

(a) Calculate equilibrium prices and industry output for two market structures: when this market is supplied by a large number of perfectly competitive firms and by a monopolist.

b) Now suppose that there are only two firms in this industry which compete in quantities. State the profit-maximization problem of each firm and and their optimum strategies. Calculate equilibrium price and output per firm.

1. Identify six European countries in the top 10 index of global competitiveness.
2. Evaluate the economic indicators that contribute to the success of these six countries in global competitiveness.
3. Provide some recommendations to the countries’ economic managers to strengthen or maintain their best performance.
4. Based on your research, explain why European countries continue to dominate the overall rankings in the global competitiveness index.

The airport will have an effective gross income of $30 million over the next year and operating expenses that are 20% of effective gross income over the forecast horizon after being $10 million this year due to a major renovation. The effective gross income is expected to continue to grow at the rate of the local economy which is a steady 3.25%. A going-in cap rate based on some fairly stale comparables in this highly illiquid market is 6.75% and the going-out cap rate is forecast to be the same.

The seaport enjoyed $38 million in effective gross income last year but this will only grow at 1% a year due to deglobalization effects. Last year operating expenses were $9.5 million but they are expected to grow at the local rate of inflation of 7.5% which will decline linearly in time before hitting the central bank target of 2% (where it will remain thereafter) in 10 years time. The pension plan requires a 12% return on an asset like this and the going out cap rate is expected to be 9% when the host country has completed its industrialization and transition to a consumer economy.

Calculate the value of each of these properties but just as importantly your portfolio manager wants you to produce margins of error where you assume each going-out cap rate was off by 25%

The following event has occurred at times in the history of Canada: “The government increases its expenditure on goods and services in a time of war or increased international tension.” Explain the effects of the event on real GDP and the price level, starting from a position of long-run equilibrium. Use the AS-AD model.

4. If the price of one of the products associated with indifference curves increases, all else the same, what is the result? Prices will be lower,  The individual is able to get to a lower level of utility. The individual is able to get to about the same level of utility. The individual is able to get to a higher level of utility.

5. If the price of one of the products associated with indifference curves decreases, all else the same, what is the result? Prices will be higher. The individual is able to get to about the same level of utility. The individual is able to get to a lower level of utility. The individual is able to get to a higher level of utility.

6. Which of the following statements best describes how individuals maximize their utility given a constraint? None of these possible answers make sense, This can be shown when the budget constraint is tangent to the lowest indifference curve possible, This can be shown when the budget constraint is tangent to the highest indifference curve well above the constraint, This can be shown when the budget constraint is tangent to the highest indifference curve

7. Whenever marginal benefit is less than marginal cost, the decision maker should do _____ of the activity. less, none, that exact amount, more

1. What is the difference between microeconomics and macroeconomics? Provide an example of each.

2. Price discrimination. How can this be a good thing for you personally?

3.   Illustrate (draw) and explain the Laffer Curve. Where are we currently as a nation (in your opinion) on the Laffer Curve?

1. What is the producer’s problem (or a firm’s goal) in microeconomics?

2. A firm achieving its goal also achieves economic efficiency.

1. How is economic efficiency defined?

2. How does it differ from technological efficiency?

The price system accomplishes much for society that government could do but probably could not do as well. Explain

Future political risks, if any in Kenya

Consider a country which currently has a constant total fertility rate, a constant mortality rate, and no emigration or immigration. Explain why the population growth rate could still be changing over time.

Read the second Management Focus feature in the text (Chapter 9), “NAFTA’s Tomato Wars,” then answer the following questions 1) Was the establishment of a minimum floor price for tomatoes consistent with the free trade principles enshrined in the NAFTA agreement? Why or why not? 2) Why, despite the establishment of a minimum floor price, have imports from Mexico grown over the years? 3) Was the Commerce Department right to establish a new minimum floor price, rather than scrap the agreement and file an anti-dumping suit against the Mexican tomato producers? Who would have suffered? Response should be a minimum of 150 words total and contain no quotes.

“In the years between 1815 and 1848, two rival political programs appeared, reflecting rival sets of hopes. Some Americans felt largely satisfied with their society the way it was, slavery and all, especially with the autonomy it provided to so many individual white men and their local communities. They wanted their familiar America extended across space. Other Americans, however, were beguiled by the prospect of improvement to pursue economic diversification and social reform, even at the risk of compromising some precious personal and local independence. They envisioned qualitative, not just quantitative, progress for America.”

Explain this passage from Daniel Walker Howe in a more or less narrative style essay. What are these “rival political programs,” what specifically did they want America to look like, and in what ways did they advocate for their respective visions? Furthermore, what is the difference between “qualitative” and “quantitative” progress and how do they differ? Finally, how does the Civil War, and it's lead up, figure in these conflicting visions?

Question 3. A 1-year European put option on a stock with strike price of $50 is quoted as $7; a 1-year European call option on the same stock with strike price $30 is quoted as $5. Suppose you long one put and short one call (one option is on 100 share).

a) Draw the payoff diagram for your put position and call position.

b) After 1-year, stock price turns out to be $45. What is your total payoff? What is your total profit/loss?