(15 points) Canadian red wheat is a normal good, in a perfectly competitive market which is in long run equilibrium There occurs a recession in the economyincomes fall What effect does this have on short run equilibrium Explain concisely the step by step process by which the industry returns to long run equilibrium Your answer should include the effects on the individual firm's output and profit, as well as any industry wide adjustments that take place In addition, show your answer graphically, including the relationship between the firm and the industry (16 points) a When unemployment exists in the supply and demand labor market model, there is an adjustment that brings the model back into equilibrium back to full employment Orthodox economists cite two mechanisms that cause thisadjustment Explain each b In the orthodox supply and demand labor market model, it is assumed that workers do not learn skills on the job How would removing this assumption from their model (and now assuming that workers do learn skills on the job), affect how firms are supposed to act when unemployment exists Will the labor market still clear Explain in detail (10 points) Pizza Bob is Salem's only purveyor of authentic Montana style pizza Below is the demand and total cost schedules facing Pizza Bob Price pizzaPizzas Sold dayPizzas Sold dayTotal Cost day $122020$210 113030270 104040310 95050360 86060420 77070490 68080570 Bob correctly notes that to maximize his profits, he should produce where marginal cost equals marginal revenue How many pizzas should Pizza Bob make What price should he charge

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(15 points) Canadian red wheat is a normal good, in a perfectly competitive market which is in long run equilibrium.There occurs a recession in the

(15 points) Canadian red wheat is a normal good, in a perfectly competitive market which is in long run equilibrium.There occurs a recession in the economyincomes fall.What effect does this have on short run equilibrium?Explain concisely the step-by-step process by which the industry returns to long run equilibrium.Your answer should include the effects on the individual firm's output and profit, as well as any industry-wide adjustments that take place.In addition, show your answer graphically, including the relationship between the firm and the industry.

(16 points) a. When unemployment exists in the supply and demand labor market model, there is an adjustment that brings the model back into equilibriumbackto full employment.Orthodox economists cite two mechanisms that cause thisadjustment.Explain each.

b. In the orthodox supply and demand labor market model, it is assumed that workersdo not learn skillson the job.How would removing this assumption from their model (and now assuming that workers do learn skills on the job), affect how firms are supposed to act when unemployment exists?Will the labor market still clear? Explain in detail.

(10 points) Pizza Bob is Salem's only purveyor of authentic Montana style pizza. Below is the demand and total cost schedules facing Pizza Bob.

Price/pizzaPizzas Sold/dayPizzas Sold/dayTotal Cost/day

$122020$210

113030270

104040310

95050360

86060420

77070490

68080570

Bob correctly notes that to maximize his profits, he should produce where marginal cost equals marginal revenue.How many pizzas should Pizza Bob make?What price should he charge?