1. If one company provides 70% of the jobs in a town, the company could exert _____ power in its labor market.

a) differential

b) compensating

c) monopoly

d) monopsony

2. What will happen in the labor market for commercial truck drivers if the government raises the requirements needed to obtain a commercial driver's license?

a) The supply of truck drivers will decrease, resulting in a higher wage and lower quantity of labor.

b) The supply of truck drivers will increase, resulting in a lower wage and higher quantity of labor.

c) The demand for truck drivers will decrease, resulting in a lower wage and lower quantity of labor.

d) The demand for truck drivers will increase, resulting in a higher wage and higher quantity of labor.

A high end steakhouse is the only real restaurant in town. They have a total cost function of ?(?) = ??? + ? ? and face a market demand for steak dinners of ??(?) = ??? − ??. a) Find the monopolist’s profit-maximizing price that they should charge. What profits would they earn?

b) Is the monopolist operating in the short run or the long run? Explain how you know. Illustrate the monopolist’s problem graphically.

c) Suppose the monopolist wants to increase their profitability. Come up with and explain two alternative pricing strategies that they could engage in.

There are two ice cream shops, A and B, in a touristic town. Each shop needs to individually choose the price it charges for a scoop of ice cream, which can be either $2, $4 or $5. Each firm wants to maximize their total revenue from customers via an appropriate choice of price. It is expected that

− 8,000 scoops of ice cream are purchased by tourists, who are split evenly between the two shops regardless of the prices charged by these shops.

− Locals also purchase scoops of ice cream: Assume that locals purchase 800 scoops in total.

− Being more knowledgeable of market conditions, locals purchase their ice cream from the shop with the lowest price. If both shops charge the same price, then the locals are split evenly between the two shops.

(a) Now, write the normal form game between the two ice cream shops where payoffs in each cell of the table represents the total revenue of each shop. Make sure to write your calculated payoff pairs for each cell of the normal form game.

(b) Explain the underlying logic behind your calculated payoffs in the normal form game of part (a) by showing your full workings of payoffs for a sample case where both shops charge the same price. Do the same also for a sample case where firms charge different prices.

(c) Reproduce the normal form game from part (a) and use it to determine the outcome of this game by applying iterated elimination of strictly dominated strategies. Explain your workings.

Complete parts​ (a) and​ (b) below.

The number of dogs per household in a small town

(a) Find the​ mean, variance, and standard deviation of the probability distribution.

Find the mean of the probability distribution.

u=___(Round to one decimal place if needed)

Find the variance of the probability distribution.

o2=___(round to one decimal place if needed)

find the standard deviation of the probability distribution

o=____(round to one decimal place when needed)

(b) Interpret the results in the context of the​ real-life situation.

A) a household on average has 0.5 dogs with a standard deviation of 0.9 dogs

B. A household on average has

0.5

dog with a standard deviation of

eleven

dogs.

C. A household on average has

0.9

dog with a standard deviation of

0.5

dog.

D.

A household on average has

0.8

dog with a standard deviation of

0.9

dog.

.9

Assume there is a badly polluting steel plant in town. Marginal pollution cost is growing and given by MC=10X where X stands for the quantity of pollution and is measured in percent (0% pristinely clean, 100% deadly pollution). In contrast, marginal reduction cost (MCR) is constant and given by MCR=10. Refer to the Coase Theorem and assume that the government grants citizens the exclusive property right to clean air. After trade, what is the "optimal" air pollution (in %)? What is the resulting welfare gain or loss compared to the initial pristine air scenario (before trade).

- the optimal pollution equals 5, and there is a welfare gain of 5

- the optimal pollution equals 10, and there is a welfare loss of 5

- none of the listed options

- the optimal pollution equals 1, and there is a welfare gain of 5

- the optimal pollution equals 1, and there is a welfare loss of 5 ]

- there is no optimal pollution, the optimal pollution. is always zero

A residential home worth $ 1,249,000 in a town. Create an amortization schedule with 2 different financing options with Excel. Complete the following steps:

I. Determine a down payment. (a standard down payment is 20%)

II.  Research 2 different financing options (describe)

III. Use Excel to create a complete amortization schedule for the lif of both financing options.

IV. Write up an analysis that compares and contrasts the two financing options in detail. Please be specific. Include justifications for selecting an option.

You are planning to open a special restaurant in a college town. Please give a workable plan and write a financial analysis report to present its feasibility according to the following procedure.

Please answer the following questions in your analysis.

1. Brief introduction

Please introduce your restaurant, including at least the following three aspects.

What is the food style of your restaurant and why? (Traditional American, Italian, Thai, etc. Burgers, Sushi, noodles, seafood, etc.)

What’s your restaurant’s location and why?

The scale of your restaurant.

2. Cost and Benefit Estimation

Please conduct on-site investigation (show your work and references if using any) to get the cost & benefit estimation including at least the following aspects:

Purchase storefront (assume it as non-depreciable asset) and license fee

Tables, chairs, tableware, air conditioner, etc.

Decoration, advertisement, etc.

Number of employees and their average salary.

Annual cost of raw material, utilities, etc.

Daily number of customers, personal price.

3. Financing

Suppose you need an initial fund equal to the upfront investment, i.e., sum of a, b, and c in Question 2. You have half of it and still need a 3-year bank loan of the other half with annual interest rate 9%.

4. Income statement

Display income and expense data in a tabular format and get the annual profit for your restaurant. When considering depreciation, please state your own assumption clearly.

5. Cash flow and payback period

Draw cash flow of your investment and find the year of payback period. The payback period is the length of time required to recover the cost of an investment ignoring the time value of money.

6. IRR

Using your payback period to calculate IRR and compare it with MARR. We assume MARR to be 5%.

7. Modification

If IRR is less than MARR, think of potential method to modify your plan.

You live in a town with 300 adults and 200 children, and you are thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000, but selling an extra ticket has zero marginal cost. Here are the demand schedules for your two types of customers:

To maximize profit, you would charge $____??? for an adult's ticket and $____??? for a child’s ticket. Total profit in this case would be $___???.

The city council passes a law prohibiting you from charging different prices to different customers.

Now you set a price of $____??? for all tickets, resulting in $___?? in profit.

Indicate whether each of the following groups of people is better off, worse off, or the same because of the law prohibiting price discrimination.

Suppose the fixed cost of the play were $2,600 rather than $2,000.

Complete the following sentences indicating how this would change your answers to the previous parts.

In the presence of price discrimination, the adult price of a ticket would INCREASE, REMAIN THE SAME, OR DECREASE?, and the child price would INCREASE, DECREASE, OR REMAIN THE SAME? . Total profit would RISE OR FALL? to $____?.

If price discrimination were banned and the monopolist continued to produce the play no matter what the profit, the price of a ticket would INCREASE, DECREASE, OR REMAIN THE SAME? , and total profit would RISE OR FALL? To $____?.

1) A sample of 12 recent births at a local hospital in a small town has the following birth weights (in ounces): 89, 122, 137, 144, 98, 113, 124, 138, 108, 117, 105, 99

a) Compute the sample mean and standard deviation of the birth weights. (You can use technology to find this.)

b) Assume the population distribution of birth weight is approximately normal. Construct the 95% confidence interval to estimate the mean birth weight of all babies born in this small town. (Should you use a t-score or a z-score?)

2) In a study of possible correlation between the height, x in cm and the weight, y in kg, of chimpanzees, a sample of 40 animals produces a correlation coefficient of ? = 0.813, and a regression line with equation ? = 0.34? + 19.5. What is the expected weight of a 80 cm tall chimpanzee?

a) 177.9??

b)57.1??

c) 24.0??

d) 46.7??

3) In #2, what does the correlation coefficient tell you?

a) There is no linear correlation between the height and weight of a chimpanzee.
b) That for every 1 cm more in height a chimpanzee is, it weighs 0.813 more kg.
c) There is a weak positive linear correlation between the height and weight of a chimpanzee. d) That for every 1 kg more in weight a chimpanzee is, it is 0.813 cm taller.
e) There is a strong positive linear correlation between the height and weight of a chimpanzee.

Dilly Farm Supply is located in a small town in the rural west. Data regarding the store's operations follow: Image.png Sales are budgeted at $290,000 for November, $310,000 for December, and $210,000 for January. Collections are expected to be 65% in the month of sale and 35% in the month following the sale. The cost of goods sold is 80% of sales. The company desires to have an ending merchandise inventory at the end of each month equal to 70% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. Other monthly expenses to be paid in cash are $21,100. Monthly depreciation is $21,000. Ignore taxes.

1. The cost of December merchandise purchases would be:

2.December cash disbursements for merchandise purchases would be: