1. The poinsettia is a wildflower native to Mexico. It was almost unknown in the U.S. until the Ecke family began selling them in the early 1900s from their flower stand in California. A member of the Ecke family discovered a grafting process that resulted in a much thicker and more colorful poinsettia plant, which became hugely popular at Christmas. The Ecke family did not attempt to patent the grafting process but instead managed to keep the process a secret for many decades, and so maintained a monopoly on the commercial production of poinsettias for all those years. Eventually, a university professor figured out the grafting technique and published it in an academic journal. What do you think happened to the price of poinsettias after the publication of that article? Why?

2. The beer manufacturing industry in the U.S. includes dozens of independent firms. Yet the American beer industry is regarded as one of the most oligopolistic industries in the country. Why is this?

3. implicit costs are defined by economists as nonmonetary opportunity costs. Why is it important for a firm to take these costs into consideration when evaluating a potential activity, when they don't involve any monetary expense?

4. Consider the following two taxes: 1) a state imposes a 10 cent tax on every gallon of gasoline sold in the state to pay for road maintenance and improvements, and 2) a state imposes an additional 1% income tax on all state residents to pay for the construction of 50 new soccer fields throughout the state. Which of these two taxes is more consistent with the benefits-received principle? Why?