6 show the workings.

Name: 2. (12 points total) Julio's income is $24 and he consumes only two goods, cookies (C] and sodas (5). Julio's preferences are described in the following table. Several columns have been left blank for you to fill in as you work through this problem. TU stands for Total Utility and MU stands for Marginal Utility. Cookies Sodas TUC MUC MU/$4 MUc/$2 TU MUS MU:/$2 1 448 108 2 832 150 1072 3 244 4 1192 4 304 5 1240 360 6 1280 6 412 7 1312 460 1336 504 (a) (2 points) As you work through the following questions, fill in all of the blank cells in the table above. (b) (2 points) If the price of a cookie is $4 and the price of a soda is $2, how many cookies and sodas should Julio consume in order to maximize his overall total utility, given his income of $24? Explain briefly. (c) (2 points) What is Julio's maximized overall total utility? Explain briefly. (d) (2 points) Now, suppose that the price of a cookie falls to $2 and the price of a soda remains $2. Now how many cookies and sodas should Julio consume in order to maximize his overall total utility, given his income of $247 Explain briefly. (e) (2 point) Based on your answers to parts a) and c) describe Julio's demand schedule for cookies by filling in the table below: Price per Cookie Quantity of Cookies Demanded $2 $4 (f) (2 points) For Julio, what kind of goods are cookies and sodas (substitutes, complements, or neither)? Explain briefly.Question 38 The following graph shows the current market outcome for a monopolistically competitive firm Price MO 160 141 ATC 123 33 Demand MR 100 133 33 13492 Quantity From the graph, we can conclude that the firm is in a short-run equilibrium and we would expect some new firms to enter the market. a long run equilibrium and we would expect some of the firms that are currently in the market to exit. a long-run equilibrium and we would expect some new firms to enter the market. a short-run equilibrium and we would expect some of the firms that are currently in the market to exit.A cluopolv faces a market demand of p = 121] - {1. Firm 1 has a constant marginal cost of MC1 = $10 Firm 2's constant marginal cost is ME2 = $20. Calculate the output of each rm, market output, and price if there is {a} a collusive equilibrium or {b} a Iileumot equilibrium. The collusive equilibrium occurs where q] equals and q2 equals . {Enter numeric responses doing real numbers rounded to two decimal places} Market output is The collusive equilibrium price is $ The CoumotNash equilibrium occurs where q] equals and q: equals Market output is Furthermore, the equilibrium occurs at a plice of $ A duopoly faces a market demand of p = 150 -Q. Firm 1 has a constant marginal cost of MC = $10. Firm 2's constant marginal cost is MC" = $20. Calculate the output of each firm, market output, and price if there is (a) a collusive equilibrium or (b) a Cournot equilibrium. The collusive equilibrium occurs where q, equals |and q2 equals . (Enter numeric responses using real numbers rounded to two decimal places)[2] Suppose there are 2 firms in the industry with the same constant marginal cost, MC =$10. They face a market demand curve given by Q =100 - P. a. Find the equilibrium quantities and price of Stackelberg competition where firm 1 moves before firm 2. b. Now assume firm 2 is not yet in the market and its fixed cost of entry is 600. Using the best response function of firm 2, express firm 2's profit as function only of q, in case it enters the market. c. Explain how you can get limit output using this profit function of firm 2. (You need NOT solve for exact number of limit output.)Chapter 22 or 35 International Finance : Pre-Class & In-Class Activities Packet Name/I.D. Number: Section: Date: Part 2. Matching: Match the Key terms in Column "A" with the definitions in Column "B" by writing the block (upper) case letter of your choice under column "A" and match the definitions in column "B" with the meanings or examples or real world applications in column "C" by writing the small (lower) case letter of your choice under column "B" Column "A" Column "B" Column "C" 1. Trade Surplus A. A decrease in the value of one currency relative to other currencies. a. The European Monetary Union (EMU) also known as B. The system whereby a nation's currency is set at a fixed rate relative to the "EURO ZONE" is an example that adopted the EURO 2. Trade Deficit all other currencies, & central banks intervene in the foreign exchange (E) on January 1, 1999 as its common currency. 3. Foreign market to maintain the fixed rate. A Negative balance ( or terms) of trade (ToT). The weakness of the currency vis-a-vis other Exchange C. A government action that changes the exchange rate by lowering the currencies in the foreign exchange (FOREX) market Market official price of a currency. d. When the value of the currency is higher than its D. An increase in the value of one currency relative to other currencies. equilibrium or market clearing rate in the FOREX market. 4. Exchange Rate E. The condition that exists when the value of imports is greater than the The theory that asserts exchange rate reflects the 5. Flexible number of foreign currency units required in a foreign value of exports for a nation. country to buy the same basket of good & services as $1 Exchange F. Theory stating that exchange rates between any two currencies will does in the U.S. Rate System adjust to reflect changes in the relative price levels of the two countries. f. The system in which central bank officials establish a fixed parity (exchange rate) between a currency and 6. Appreciation G. A currency is overvalued if its price in terms of other currencies is above other major currencies by policy. the equilibrium price. Under a fixed exchange rate system, official increase 7. Depreciation 9. H. A geographic area in which exchange rates can be fixed or a common in the value of a currency in terms of other currencies by 8. Purchasing currency used without sacrificing domestic economic goals, such as low central bank authorities. h. A Positive balance (or terms) of trade (ToT) Power Parity unemployment. 1. A government act that changes the exchange rate by raising the official ". The strength of the currency vis-a-vis other (PPP) Theory currencies in the FOREX market. price of a currency. The free market for major foreign currencies 9. Fixed Exchange J. The system whereby exchange rates are determined by the forces of k. "Dirt-Floating", a market for FOREX in which the Rate System supply & demand for a currency. currency is allowed to fluctuate within specified margins 10. Overvalued K. A managed flexible exchange rate system, under which nations now & and the Central Bank intervenes when the exchange rate for the currency is out of those margins ("out of bounds") then intervene to adjust their official reserve holdings to moderate major 11. Undervalued When the value of a currency is lower than its swings in exchange rates. equilibrium or market clearing rate in the FOREX market. 12. Devaluation L. The price of one currency in terms of another currency. m. The rate at which one currency is exchange for another 13. Revaluation M. The condition that exists when the value of exports is greater than the in the FOREX market. value of imports for a nation. n. Under a fixed exchange rate system, official reduction 14. Managed Float in the value of a currency in terms of other currencies by N. The market in which currencies of different countries are exchanged. central bank authorities. 15. Optimal O. A currency is undervalued if its price in terms of other currencies is o. A system whereby the free market determine the rate Currency Area below the equilibrium price. at which one currency is exchanged for another