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There are 10 potential entrants into the market for tomatoes. All tomato growers are identical. They face a fixed cost of 500 if they choose to enter the market and then have a marginal cost of 10 per bushel of tomatoes produced. Those who enter the market produce a homogeneous tomato with demand P = 150 2Q, where Q is the number of bushels. The entering firms compete according to Cournot competition. Before choosing quantities firms sequentially announce whether they are entering and pay their fixed cost if entering.

1. Suppose N firms enter the market. Since this is a symmetric Cournot model, we've shown earlier in the class that in Nash Equilibrium each firm will produce, qN = (1/(N + 1))*((A c)/B) . So for this model, qN = 1/(N + 1) *(150 10)/2 = 70/(N + 1) . Given this, what is the price of tomatoes and the total quantity of tomatoes produced as a function of N? 2. What is the profit of the entering firms as a function of N? 3. What is consumer surplus as a function of N?

[2:40 PM, 2/20/2022] flo: Deliver a commentary about the authenticity of the cuisine. For example, early Chinese-Canadian restaurants modified their cuisine significantly to accommodate several circumstantial parameters, such as customer preferences and ingredient availability. Is your subject ethnic cuisine well accepted in its full authenticity or have restaurants had to compromise? If so, why? This is a complex question, and you should avoid generalizing while examining the nuances. Provide examples of the range of business's which represent this cuisine from fine dining to street foods, fast casual and QSR experiences. What is a common thread to these establishments? 4. The Customers What is the demographic of the target market for the largest segment of your cultures business's? Why? (IMPORTANT: Be careful with this question. Resist the urge to merely state that they are targeting all market segments. This lack of targeted strategy is dangerous and bad for business. Successful restaurants may target multiple groups but cannot successfully target all groups. Identify clearly which groups are targeted, then show the evidence for your claims. How long has this ethnic segment of restaurants been in Canada and what has been their pattern of popularity? Why? Has their cuisine ever been trendy? When? If that trend has passed, how and why did the surviving restaurants remain in business? How do they continue to meet the needs of their customers? 5:17 Delivery - 2 components 1. You will produce a live presentation, using the following guidelines. (80%) The presentation should be 10 minutes long All members must be present and on camera to receive a grade. There will be NO alternate presentation date. The presentation must be rehearsed for timing, flow, and quality. No repetition or contradiction will be allowed. All team members must be familiarized with each other's work and approve of it. If you do not approve of it, discuss it and rework it before the presentation deadline. Any information, image, idea or quotation must be properly referenced using A..A@Conestoga. 2. A written report on your ethnic group to be posted publicly on eConestoga for your peers to read and review as it will be included as course material to be covered for quizzes and exams. (20%) The report should be succinct and to the point. It should be at least 1200 words and no longer than 1500 words, and single spaced. Use bullet form, no paragraphs Be sure to support all your ideas with facts Include a reference page (on page 3) You will be graded on legibility, grammar, and spelling ***NO LATE ASSIGNMENTS WILL BE ACCEPTED Grading Rubric Presentation Marks Completeness, Accuracy and Organization 10 Knowledge / masterv or the Sublect/depth or research 20 Analysis, Connections and Relevance Communication Skills Connection to Audience... Fase and Professionalism integrity. Ideas are supported with facts. Citations and references utilized correctly. Report Written report format, ength. anguage, citations, and references. 10 Written report contains the Kev Ideas, communicated eftectively TOTAL 100 *Southern Ontario refers to area between Barrie. Windsor and Ottawa. @Walker Rondeau (Provincial Park) @conestoga.desire2learn.com\ [2:50 PM, 2/20/2022] flo: 1. You are selling a product in an area where 30 % of the people live in the city and the rest live in the suburbs. Currently 20 % of the city dwellers user your product and 10 % of the suburbanites use your product. Given that someone uses your product, what is the probability that the person lives in the city?

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Is the answer consistent with what I expected?

2. A problem is given to three persons Q, R, and S whose respective chances of solving it are 2/7, 4/7, 4/9 respectively. What is the probability that the problem is solved by at least one?

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What do I want to find ?

What do I expect the answer to be?

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Is the answer consistent with what I expected?

3. Suppose that in an adult population the proportion of people who are both overweight and suffer hypertension is 0.09; the proportion of people who are not overweight and suffer hypertension is 0.11; the proportion of people who are overweight and do not suffer hypertension is 0.02; and the proportion of people who are neither overweight nor suffer hypertension is 0.78. An adult is randomly selected from this population. Find the probability that the person selected suffers hypertension given that he is overweight.

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What do I expect the answer to be?

How do I go from what I know to what I want to find out?

Is the answer consistent with what I expected?

4. A man and his wife appear in an interview for two vacancies in the same post. The probability of husband's selection is (1/7) and the probability of wife's selection is (1/5). If the husband's selection is independent of the wife's selection, what is the probability that only one of them is selected?

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What do I want to find out?

What do we expect the answer to be?

How do I go from what I know to what I want to find?

Is the answer consistent with what I expected?

5. A manufacturer produces sweatshirts through a standardized process. The process is efficient and cost effective, but as such, it produces 20% defects. A quality management program of thoroughly inspecting every sweatshirt is not cost effective. As an alternative, the manufacturer decides to use a program of cursory inspection of each sweatshirt because it is cost effective. A satisfactory sweatshirt will always pass the cursory inspection. Approximately 10% of the defective sweatshirts will also pass the cursory inspection test. What is the probability of a defective sweatshirt given that it has passed the cursory inspection?

What do I know?

What do I want to find out?

What do I expect the answer to be?

How do I go from what I know to what I want to find?

Is the answer consistent with what I expected?

1. (55 points) Egbert consumes only axes (X) and mead (Y ). His utility function is U = XY , his income is I and the prices of axes and mead are pXand pY respectively. (a) What is Egbert's demand for for axes and mead? (Show all the steps.) (b) What is Egbert's indirect utility function? (c) What is Egbert's compensated demand for axes and mead? (d) What are the numerical values for (b),(c) and (d) if I = 24, pX= 1, pY= 2? (e) Now the price of mead rises to pY= 3. What income would Egbert need to be able to reach his old utility level at the new prices? (f) If he had this income, what quantities of each good would he consume at the new prices? (g) Given his actual income, how much of each good will Egbert consume at the new prices? (h) What is the income effect of this price change? (i) What is the substitution effect of this price change? (j) Show the Slutsky equation holds for this price change. (k) What loss in welfare (in $) does Egbert suffer due to the price change? Give three different possibilities.

2. (5 points) The effect on an isoquant of Hicks-neutral technological progress - redraw this diagram. Show (either on the same diagram or a second one) the effect of labor-saving technological progress. Make clear (on the diagram and with some text) what the difference is between the effects of the two types of technological progress.

1. A firm's analysts estimate that the firm can manufacture a product according to the production function :

Q = F (K ,L) = K3/4 L1/4

a. Calculate the average product of labour, APL, when the level of capital is fixed at 81 units and the firm uses 16 units of labour. How does the average product of labour change when the firm uses 256 units of labour?

b. Find an expression for the marginal product of labour, MPL, when the amount of capital is fixed at 81 units. Then, illustrate that the marginal product of labour depends on the amount of labour hired by calculating the marginal product of labour for 16 and 81 units of labour.

c. Suppose capital is fixed at 81 units. If the firm can sell its output at a price of $200 per unit of output and can hire labour at $50 per unit of labour, how many units of labour should the firm hire in order to maximize profits?

2. A firm's product sells for $4 per unit in a highly competitive market. The firm produces output using capital (which it rents at $25 per hour) and labour (which is paid a wage of $30 per hour under a contract for 20 hours of labour services). Complete the following table and use that information to answer these questions.

a. Identify the fixed and variable inputs. b. What are the firm's fixed costs? b. What is the variable cost of producing 475 units of output? c. How many units of the variable input should be used to maximize profits? d. What are the maximum profits this firm can earn? e. Over what range of the variable input usage do increasing marginal returns exist? f. Over what range of the variable input usage do decreasing marginal returns exist? g. Over what range of input usage do negative marginal returns exist?

Table: K L Q. MPk APk APL VMPK 0 20 0 1 20 50 2 20 150 3 20 300 4 20 400 5 20 450 6 20 475 7 20 475 8 20 450 9 20 400 10 20 300 11 20 150

3. Explain the difference between the law of diminishing marginal returns and the law of diminishing marginal rate of technical substitution.

4. An economist estimated that the cost function of a single-product firm is:

C (Q) = 90 + 35Q + 25Q2 + 10Q3

Based on this information, determine: a. The fixed cost of producing 10 units of output. b. The variable cost of producing 10 units of output. c. The total cost of producing 10 units of output. d. The average fixed cost of producing 10 units of output. e. The average variable cost of producing 10 units of output. f. The average total cost of producing 10 units of output. g. The marginal cost when Q=10.

6. A manager hires labour and rents capital equipment in a very competitive market. Currently, the wage rate is $9 per hour and capital is rented at $10 per hour. If the marginal product of labour is 50 units of output per hour and the marginal product of capital are 60 units of output per hour is the firm using the cost-minimizing combination of labour and capital? If not, should the firm increase or decrease the amount of capital used in its production process?

7. A firm produces output according to a production function: Q= F(K,L) = min{4K,4L}

a. How much output is produced when K=2 and L=3? b. If the wage rate is $60 per hour and the rental rate on capital is $40 per hour, what is the cost-minimizing input mix for producing 8 units of output? c. How does your answer to part b change if the wage rate decreases to $40 per hour but the rental rate on capital remains at $40 per hour?

There are 10 potential entrants into the market for tomatoes. All tomato growers are identical. They face a fixed cost of 500 if they choose to enter the market and then have a marginal cost of 10 per bushel of tomatoes produced. Those who enter the market produce a homogeneous tomato with demand P = 150 2Q, where Q is the number of bushels. The entering firms compete according to Cournot competition. Before choosing quantities firms sequentially announce whether they are entering and pay their fixed cost if entering.

1. Suppose N firms enter the market. Since this is a symmetric Cournot model, we've shown earlier in the class that in Nash Equilibrium each firm will produce, qN = (1/(N + 1))*((A c)/B) . So for this model, qN = 1/(N + 1) *(150 10)/2 = 70/(N + 1) . Given this, what is the price of tomatoes and the total quantity of tomatoes produced as a function of N? 2. What is the profit of the entering firms as a function of N? 3. What is consumer surplus as a function of N? 4. In a free entry equilibrium, how many firms will enter the market? 5. What is the profit of the first firm to announce it will enter the market? 6. Suppose a social planner were to choose the number of firms to enter the market to maximize total welfare, how many firms would enter?

. (70 points total) ) Homer Simpson, does not abide by the life cycle theory of consumption. Homer has a "let's live life like it's our last day" mentality and thus, he prefers to consume more today, relative to the future. In particular, Homer prefers to consume exactly twice as much today (c), relative to consumption next period (cf). Homer's current income = $300K and his future expected income = $200K. He has no wealth (neither current nor expected) since he lives like today is his last. Given that Homer faces a real interest rate of 10% ( 0.10). Please answer the following questions.

1.(5 points) Calculate Homer's optimal consumption bundle showing all work. Then draw a completely labeled graph (the two period consumption model) depicting this initial optimal consumption bundle as point C*A.

2.(5 points) Ben Bernanke and the Fed are not happy with the state of the economy (we are in the midst of the Great Recession!) and worry about an impending recession. As a result, the Fed lowers rates so that the new real rate is zero (0%) Recalculate the optimal bundle for Homer and add this point to your graph and label as point C*B.

3.Marge is worried about saving for the kids' college education and does some research investigating whether most consumers have spending patterns like Homer. She encounters the life cycle theory of consumption and finds that this popular economic theory suggests that the way to maximize life time utility is to perfectly smooth consumption through time. Marge discusses this new development with Homer and convinces him to change his preferences to that of a perfect smoother, like our friend Dagwood. Resolve for Homers optimal basket. Real rates are zero still.

4. Ben Bernanke and the Fed are still not happy with the state of the economy (we are in the midst of the Great Recession!) and worry about an impending recession. As a result, the Fed lowers rates again so that the new real rate is negative 5%. Recalculate the optimal bundle for Homer (given his new preferences) and add this point to your graph and label as point C*D .

5.Did the Fed policy work as in stimulating the economy as measured by the change in Homer's current consumption? Why or why not? Explain using the income and substitution effects. Do these income and substitution effects work in the same or opposite directions? Explain.

6.) In the space below, draw two savings functions for Homer. The first savings function is for the initial conditions, before Homer changes his preferences. Label as point A where r = .10, consistent with the initial conditions. Label as point B, where r = zero.

The second savings function is after Homer changes his preferences. Label as point C, when real rates are zero and as point D, when real rates are negative 5% (-.05).

Additional instructions from the student:

explain alll parts of the question