After the War of the Rings, the Ents decide to open a perfectly competitive firm, ENTerprise Nursery, to sell Fangorn Forest native trees and shrubs. Since there are so few Ents (since they lost the Entwives), the Ents have to hire workers in the competitive labor market.

a) Draw ENTerprise Nursery in both the competitive nursery market and the competitive labor market. At what point does ENTerprise Nursery produce? At what point does ENTerprise Nursery hire? Show the equilibrium wage rate and quantity of labor hired.

b) Vigorous rebuilding in Middle Earth after the War of the Rings causes all of its inhabitants to want to drastically improve and expand the landscaping on all their property. Graph what happens to ENTerprise Nursery in both the competitive nursery market and the competitive labor market as a result. Be sure to show the firm's new equilibrium price/wage and quantities of product/labor.

c) The Entwives return to Fangorn Forest and decide to open their own nursery, offering different trees (especially willows) and shrubs, imported from the Old Forest. Draw ENTerprise Nursery in both the now non-competitive nursery market and the competitive labor market. At what point does ENTerprise Nursery produce? At what point does ENTerprise Nursery hire? Show the equilibrium wage rate and quantity of labor hired.

d) Because the Entwives have returned and now there are Entings (Ent children) the supply of nursery labor increases. Graph what happens to ENTerprise Nursery in both the non-competitive nursery market and the competitive labor market as a result. Be sure to show the firm's new equilibrium price/wage and quantities of product/labor.

e) The Entwives import many of their trees from Thranduil, King of the Wood-elves in Mirkwood (and also Legolas' father). In Mirkwood, there isn't much to do besides work for King Thranduilhe is the only employer in the wood. What name (economic, please) would you call King Thranduil? Draw King Thranduil in the labor market. Show the King's wage rate and quantity of labor hired. Draw and compare King Thranduil's wage and quantity hired to the wage rate and quantity hired by a firm that was competitive in the labor market. Show any social loss.

f) The Wood-elves of Mirkwood get sick and tired of working for King Thranduil and getting only nuts and berries in return. They decide to form a Wood-elves Union. Draw King Thranduil vs. the Wood-elves Union in the labor market. Show the possible range for the equilibrium wage rate and quantity of labor hired. Draw and compare to the wage rate and quantity hired by a firm that was competitive in the labor market.

g) What tradeoff does the Wood-elves Union face? What 3 methods can the Union utilize to eliminate or reduce this tradeoff? Explain how these would work.

h) The expanded landscaping undertaken in Part C was appreciated by all the inhabitants of Middle Eartheveryone benefited. What would these benefits to others be called? Show the actual market output and price, the socially optimal output and price, and any social loss. Is too much or too little produced?

i) The goblins in the Misty Mountains disposed of the old bones and other byproducts of their waylaying operations by dumping them onto the fields of the surrounding countryside. What is this situation called? Draw this situation in the landscaping market. Show the actual market output and price, the socially optimal output and price, and any social loss. Is too much or too little produced?