Cournot duopolists face a market demand curve given by P = 90 - Q, where Q is total market demand in units. Each firm can produce output at a constant marginal cost of $30/unit.

a. What is the equilibrium price and quantity produced by each firm?

1.Define and briefly explain the relevance to an intermediate microeconomic theory class of 10 of the following. a. limit pricing g. Smith b. cartel h. kinked demand (include diagram) c. cobweb theorem I. income effect (incl. diag.) j. Pareto d. maximin k. Laspeyre e. rectangular hyperbola l. l. law of increasing cost (incl. diag.) f. third degree (incl. example)

2. Compare and contrast verbally and graphically the pricing and output decisions for a perfectly competitive firm, a monopolistically competitive firm, and oligopolist, and a monopolist.

3. Using indifference curves, analyze the effects of a price change on a normal good and a Giffen good. Be specific and complete; define all terms. How does an inferior good differ--or does it?

4. Explain and derive graphically the firm's demand curve for a factor in the case of two variable factors. Also explain and derive the market demand for a factor of production.

5. Explain thoroughly and demonstrate graphically the necessary conditions for the achievement of equilibrium in both exchange and production. NOTE: be careful. Define all terms

6. Identify verbally and graphically the feasible range of production first for the case of one variable factor and then for the case of two variable factors. Be specific and complete; define all terms.

7. Explain carefully and derive graphically a backward bending supply of labor. Be careful. Explain completely. Define all terms.

b.Select either a negative income tax or an in-kind fringe benefit program. Analyze verbally and graphically the impact of the program you have chosen. Be careful. Explain your analysis thoroughly. Define all terms

8. A Company manufactures 2 types of wooden shipping crates (T1 & T2). The profit on Type 1 is $20; Type 2, $12. Each crate must go through 2 production processes, A and B. In each production period, a total of 100 hours are available on production line A; a total of 120 hours on line B. Type 1 crates require 2 hours on line A and 4 hours on B. Type 2 requires 5 hours on line A and 3 hours on B.

Identify the criterion function and the constraints.

Graph the situation. Solve the problem (rounding to the nearest whole number). Explain your solution carefully.

9.A decrease in the price of soybean seed will cause:

10.If there is a decrease in demand and an increase in supply, the equilibrium:

11.Consumers will tend to be more responsive to a price increase if they believe that the price increase will be relatively short-term rather than long-term.

11. What is A Giffen good

12.Meanig of Engel curve and when does it slope upward

14.Calculate Acme's marginal and average cost curves. Will Acme ever choose to produce at = 0? If so, at what prices? Will they ever choose to produce at = (i.e always want to produce more, however much they are currently producing)? If so at what prices?r