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20 points Big Robbie Crusoe is still on the island, and is still pretending to be a person (RC) and a firm (RCI). RC the person buys haddock () and sells labor (), and has preferences over haddocks and leisure given by ( 24 ) = 1 4 (24 ) 3 4 . RC the company buys labor from RC and sells haddock. It has a production function = 1. (5 pts) Sketch the production function of RCI and the indifference curves of RC on the same graph. Imagine that you are the social planner, and are going to pick a feasible combination of haddock and labor to maximize the utility of RC. Find the optimal bundle 2. (5 pts)Say that the wage rate is fixed at 1, and the price of hammocks is given by . How much will RCI want to produce if the price of haddock, , is less than 1? How 3 much will they want to produce if it is more that 1? If the price is exactly 1, do their profits depend on how much they produce? Sketch RCI's supply curve. 3. (5 pts) RC gets money from selling his labor, and is also the sole owner of RCI, but assume for the moment that profits of RCI are equal to zero.. Write down RC's budget constraint. Calculate his supply of labor and demand for haddock as a function of 4. (5 pts) If the price of haddock is equal to 1, how much haddock with RC demand? How much labor will they want to sell? At this price, would RCI be happy producing at this level. Is this price an equilibrium? Is it the solution to the social planners problem?

20 points Demand for Kristal is given by () = 42 2 The supply function is given by ()=5 1. (5 pts) What is the equilibrium price, output, consumer and producer surplus in the market for Kristal. 2. (4 pts) The government decides that Kristal is too expensive, and pass a law so that the maximum price of Kristal is $4. How much Kristal will producers produce? What is their producer surplus? 3. (6 pts) Say that producers produce at the level you calculated in (2), but consumers can buy at $4, what is their consumer surplus (NOTE: the consumer will not be on their demand curve at this point, as if the price is $4, they would like to consume more that this amount) 4. (5 pts) Say that government changes the law to force producers to produce the same amount as they did in (1), but only charge $4. Assuming that the area under the supply curve is total cost, will the firms make positive or negative profits? What will consumer surplus be?

8. Ashley is helping Laia make soup. Ashley says, "Chop up your carrots. But first, find your cutting board. And before that, make sure you have all your ingredients." What mistake is Ashley making in giving directions? A. Giving directions that are too challenging B. Giving directions out of order C. Using too many big words D. Using too much negative language 9. What should employees be willing to accept when defending their ideas objectively? A. Nonverbal support B. Additional responsibility C. Critical feedback D. Personal attack 10. What should a business employee do immediately after taking a telephone message for a coworker? A. Contact a supervisor B. Write an inquiry C. Thank the caller D. File the information 11. Writing key points on notecards and then placing the cards in order of their importance is one way to A. revise facts. B. access files. C. organize information. D. verify accuracy. 12. You're giving a presentation about your company's budget, and you want to show how the budget is divided among departments. Which type of visual aid should you use? A. A line graph B. A pie chart C. A bar graph D. A table 13. Written communication is less effective when readers must A. find the information they need within the communication. B. follow the writer's logical train of thought. C. work to understand what the communication means. D. spend a minimum amount of time reading the communication. 14. Before sending a professional email message to a business associate, a businessperson should A. make sure that the message is typed in capital letters. B. code the message's importance as "high priority." C. proofread the message for spelling and grammatical errors. D. insert a vague statement in the message subject line. 15. Which of the following is an example of an informational message geared toward an external audience: A. An inventory report B. An employee handbook C. A print advertisement D. An office calendar 16. Which of the following information should be shared immediately with all staff: A. A customer has requested that the business extend its hours. B. An employee of the business has been caught shoplifting. C. A customer has complained about the service s/he received. D. An employee of the business may soon be transferred out of town.

17. Which of the following will help you have a pleasant voice when speaking to customers: A. Speaking at a comfortable volume B. Speaking very slowly C. Speaking quickly D. Speaking in a monotone voice 18. A business's service orientation is its level of commitment to A. satisfying customers. B. maximizing profits. C. surpassing competitors. D. gaining respect. 19. "I'd like to have that in writing before I give you my money," best describes the ____ customer. A. slow/methodical B. dishonest C. disagreeable D. suspicious 20. A good way to immediately calm an irate customer who has just made an angry complaint is to A. tell the customer s/he needs to contact the corporate office. B. explain company policy related to the complaint. C. ask the customer why s/he thinks there is a problem. D. thank the customer for identifying the problem. 21. A company consistently fulfills its brand promise by using A. external publicity. B. touchpoints. C. product-line extensions. D. tangible services. 22. A determining factor in what consumers buy and what producers make is A. price controls. B. market research. C. economic votes. D. money. 23. Tuition reimbursement is a way to combat the problem of limited A. natural resources. B. human resources. C. capital goods. D. consumer goods. 24. Monica has $850 for a new computer. The salesperson at the electronics stores tries to get Monica to purchase a computer that costs $1,100, but Monica can't because she doesn't possess the A. buying power. B. equilibrium. C. elasticity. D. utility. 25. Selling goods and services to customers in their homes is an example of A. wholesaling. B. retailing. C. discounting. D. producing.

26. A business purchases insurance to protect against the risk of burglary. This is an example of ____ the risk. A. transferring B. preventing C. retaining D. bonding 27. A business advertises, "Prove to us that you can buy it cheaper somewhere else, and we'll meet the lower price." This is an example of which of the following competitive techniques: A. Price fixing B. Discounts C. Price matching D. Rebates 28. One way in which the government helps protect business property is by A. setting tariffs. B. granting subsidies. C. issuing bonds. D. registering trademarks. 29. Why is it important for individuals to assess their personal strengths and weaknesses? A. To be able to negotiate their contracts B. To get the most bang for their buck C. To be able to respond appropriately in a crisis D. To improve their performance 30. How can interest and enthusiasm give people a good outlook on life? A. By enabling them to keep their frustrations to themselves B. By keeping frustrations from coming their way C. By minimizing the impact of frustrations D. By enabling them to be aggressive with others who cause frustrations 31. When Joe finishes stocking shelves, he waits to be told what to do next. Joe's manager would like for Joe to keep himself busy. Which of the following traits would Joe's manager like for Joe to develop: A. Initiative B. Creativity C. Leadership D. Assertiveness 32. Christie's coworkers know that she won't repeat what they tell her if they ask her not to do so. This indicates that Christie is a(n) ____ coworker. A. trustworthy B. straightforward C. tactful D. efficient 33. Anna's boss frequently demanded that she work late, even though she would not be paid for her overtime hours. Because of this, Anna lost respect for her boss and decided to look for a new job. This example demonstrates A. how fairness has little impact on decision-making. B. how fairness is important to professional relationships. C. how the justice approach to fairness is limited. D. how a lack of empathy undermines equality.