Test

Click here to subscribe now.

1 GRAPH for Pumpkins

  • Last year, 150,000 acres of oranges were planted across the U.S. Looking ahead in 2022, we are seeing a shortage of oranges due to a fungal infection that can potentially wipe out crops.

Fill in the chart and Graph on the Answer sheet.  If you can’t draw a graph you can copy and paste the correct graph from class notes session three. (16 points)

 (8 points for the graph and 8 points for the chart )

  • 2. The national association believes one in six dry cleaners will close, while the Dry Cleaning and Laundry Institute estimates that the industry will shrink by nearly 30 percent.
  • Casual attire, work-from-home trends accelerated during COVID pandemic

It’s not just Neighborhood Cleaners that felt the sting of the last year and a half.

Patel from the National Association of Dry Cleaners  says revenue was declining before March of last year, but that they also had seen a decline in business for several years. Experts in the field — from business owners to industry organization leaders — credit the downturn in business to many things, including the 2008 financial crisis, increasingly casual office dress codes, smoking bans in bars and restaurants, and fast fashion made from cheaper, machine-washable materials. Taken together, the result is a rapidly changing market that sometimes feels out of control

With the rise of fast fashion brands and the growing trend of younger professionals dressing more casually, the pandemic accelerated something already in motion,.

Amid such trends, dry cleaners have been left out to dry.

  • Use the concepts of fixed and variable costs to explain why 30% of dry cleaners  would close but the other 70%, also operating at a loss are able to remain open.( 10 points )
  • When a firm is “temporarily closed” (the firm shuts down) does the firm eliminate all of its costs of production? Briefly explain your answer. (5 points)

 Question 3

See the graph above, Label and Describe in terms of :

  1. Name of Market Structure (3 points)
  2. Ability to control prices. (3 points)

 

  1. Spending on advertising and marketing (3 points)
  2. Pure profit, Normal profit or losses. (3 points

 

  1. a. Use the kinked demand curve to explain why oligopolists practice price leadership. (5 points)
  2. b. Give an example of an oligopoly (3 points)

 

Question 5.

5

  1. Name of Market Structure (3 points)
  2. Ability to control prices. (3 points)

 

  1. Spending on advertising and marketing (3 points)
  2. Pure profit, Normal profit or losses. (3 points

 

 

6.

 

  1. The above firm will minimize losses by producing between Q_________ units (4 points)
  2. Q_____units.

(4 points)

 

  1. 7. Each worker gets equal pay. Fill in Average Product and Marginal Product (7 points).

  At what input level will Marginal Costs begin to rise? (7  points)

input of labor Total Product Average Product Marginal Product
0 0
_____
1                          8 _____
_____
2                        17 _____
_____
3                    27 _____
_____
4                  32 _____
_____
5                35 _____
_____
6               34 _____
`

 

 

  1. Jon quit his job as a manager at West End Savings bank where he earned $112,000 a year. He cashed in $200,000 in corporate bonds that earned 1.5% interest annually to set up a gym. Jon has decided to buy a store front and set up exercise classes. There are 1400 people who will pay $1000 a year for unlimited classes; $850 from each person goes for instructors, maintenance, equipment, insurance, depreciation

Write your answers to the following questions on the answer sheet. You must show your work.

  1. What are Jon’s total revenues? (3 pts)

B.  What are Jon’s explicit costs? In numbers (3 pts)

  1. What is his accounting profit? Numbers (3 pts)

D.  List 2 (in numbers) 2 implicit costs that Jon has not included. (3 pts)

  1. What is Jon’s pure economic profit (or loss) in numbers? (3 pts