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16. A toy company finds that it must pay a higher rent on its business space (a fixed cost here). The company has been charging a profit-maximizing price for the product it sells. One manager suggests that they increase the price to “cover the higher costs.”  With respect to profit maximization, this is

11. About 15-20 years ago, increases in the requirements of corn-based ethanol (to be mixed in with gasoline) basically created an increase in the demand for corn (indirectly).  This would tend to cause the economic profit of corn farmers to initially be greater than zero (i.e., corn farmers would tend to earn higher accounting profits than wheat farmers) because the price of corn would tend to increase.  In the long run (i.e., when farmers have time to switch what crops they plant), then we would expect to see

18. Suppose Coke and Pepsi are in a non-cooperative, Nash Equilibrium in their pricing. Coke then experiences an increase in its marginal cost of producing any given unit. Then in moving to the new Nash Equilibrium, Coke would

21. Consider a case of a price competition duopoly with differentiated, substitute products. Suppose demands are symmetric and both firms have identical constant marginal cost. Then suppose the two firms Best Response functions take the form where firm ‘i’ could be Coke and firm ‘j’ could be Pepsi, or the roles of ‘i’ and ‘j’ could be switched. Remember a Best Response function tells your profit-maximizing price given the price the other firm is thought to be charging. What is the Nash Equilibrium matching pair of prices in this case?

9. Joe’s Bearings operates in a perfectly competitive market in which the market price is $16. The upward sloping marginal cost (MC) curve crosses the U-shaped average variable cost curve at $10 and an output of 100, and continues to increase after that output. The marginal cost reaches $16 at an output of 240.

6. If a competitive firm’s marginal cost is given by the equation MC = 0.5 q.  If the market price is P = $30 per unit, how many units would this firm produce per time period (assuming it finds it worthwhile to produce more than zero units).

2. If a firm is producing Q = 20 and has ATC = $110 and AVC = $50 (at this level of output), what is this firm’s total fixed cost (FC)?

10. Consider a perfectly competitive firm that has enough capacity to produce up to 5 rubber balls (RB).  Suppose it costs firm $1 to make just one RB; $2.10 to make 2 RB; $3.90 to make 3 RB; $6.90 to make 4 RB; and $10.90 to make 5 RB.  How many RB will the firm make if the market price for RB is $3.10?

Compare and contrast prokaryotic and eukaryotic transcription.

Determine whether each event occurs during initiation, elongation, or termination of translation.