1. Suppose a firm sells a luxury and a budget version of a good. Why might that firm make the budget version of the good extremely low quality? 2. Explain economies of scope and provide an example. 3. The neoclassical theory of the firm suggests that firms produce outputs by combining inputs that were produced in a market from other individuals and firms. They do this because some other firm will have a comparative advantage in producing the input they use. Yet, firms produce some of their own inputs. Explain Ronald Coase's theory for why firms do this. 4. There is a monopolist in a market for a particular type of consumer goods. It is costly to create new types of products (brands) in this market, but consumers have different taste and thus some will prefer the new brand. Will the monopolist create too few brands or too many? Explain. 5. The way NAICS industry data are classified can change measures like HHI and Concentration Ratio. Explain one way industrial classification can bias CR upwards, and one way it can bias CR downward. 6. Why might a monopolist advertise heavily for its product even though it isn't competing with any firm for market share? 7. Why might a regulator of possibly collusive oligopolists prefer less transparency in how each firm operates