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A competitive firm operating in the short run is maximizing profits and just breaking even (zero profit). Its costs include a fixed license fee of $100 that is imposed by the state and must be paid for as long as the firm is in existence. If the license fee is raised to $150, what should the firm do to maximize profits in the short run?

Suppose the price of a Cup O’ Soup now rises to $2. Using your diagram from the previous question, show the consequences of this change in price. Assume that our student now spends only 30%  of her income on dining hall meals. Label the new optimum as point B. Upload a scan or picture of the  new graph here. Additional upload may be added at the end of the test. You may enter additional explanation using  the next question.  

Use scenario Lola Chiko. First, assume that experimenters and addicts are unable to resell the dose to each other (Imagine for example that she makes them use it in front of her).   The price Lola will charge experimenters per dose is __________

The principle of diminishing marginal utility means that when Sarah eats pizza, her satisfaction from the second slice of pizza is probably:

A factory that pollutes a river has negative externalities on residents along the river. If the factory and residents can negotiate, an efficient result can be achieved only if the property right of the river is assigned to the residents. True, False, or Uncertain? Then Justify your answer next.

When Joe watched a television movie, his viewing was ________ because other people ________ able to view the movie at the same time Joe did.

PROBLEM A Use this scenario to answer this question and the next few questions. Scenario Lola Chiko: Although her product is illegal, Lola Chiko operates her drug enterprise according to the sound business practices she learned in Econ 1110. She has two sets of customers, experimenters and addicts, and she has no competitors for this particular nasty drug. The demand schedules for each customer market per day are listed below. Her marginal cost per dose is $9.99 (you may round this to $10 in your calculations). Her fixed costs are $1000 per day for the car with dark windows, the cellular phone, life insurance, and bribes. Assume that she makes her customers pay in ten-dollar bills to reduce her carrying costs, and will not give change. The table below summarizes the demand faced by Lola.   Experimenters Addicts Combined Price Doses Revenue MR Doses Revenue MR Doses Revenue MR $80 0   ////// 10   //////      //////  70 4     12           60 8     14           50 12     16           40 16     18           Please copy and paste below, then complete the table with Revenue (Rev) and Marginal Revenue (MR). Note: Alternatively you may use a scratch paper to complete the table and then upload a scan/picture of it on the last questions of the test.

Refer to Figure above. Monopolists like perfect price discrimination because it allows them to wipe off the entire consumer surplus. If there are no fixed costs of production, the monopoly’s profit with perfect price discrimination equals

PROBLEM B Use the following scenario Painting to answer this question and the following ones. Scenario Painting: Consider the following production function for Jack’s Painting Services, where L is the number of labor hours and Q is the quantity of closets painted per week. L Q MPL APL 0 0     40 10     80 24     120 36     160 44     200 50     240 54     Copy and paste the table below and complete it by calculating the average product of labor (APL) and marginal product of labor (MPL). Note: Alternatively you may use a scratch paper to complete the table and then upload a copy of it on the last questions of the test.

Which of the following is NOT one of Karl Marx’s four types of alienation?