Question one.

15. In a perfectly competitive market, consumer surplus typically is

A) undefined.

B) positive.

C) zero.

D) negative.

16. Which of the following statements is TRUE?

A) A monopolist always produces a higher level of output than would be produced if the market were competitive.

B) At the monopolist's equilibrium, resources are being efficiently allocated.

C) Monopolists raise the price and restrict production, compared to a competitive situation.

D) With a monopoly, the value to society of the last unit produced is less than it's production cost.

17. A monopolist is maximizing profit at an output rate of 1,000 units per month. At this output rate, the price that its customers are willing and able to pay is $8 per unit, average total cost is $5 per unit, and marginal cost is $6 per unit. It may be concluded that at this monthly output rate, marginal revenue is

A) $5 per unit, and the monopolist earns zero economic profits.

B) $6 per unit, and the monopolist earns economic profits of $3,000 per month.

C) $5 per unit, and the monopolist earns economic profits of $2,000 per month.

D) $6 per unit, and the monopolist earns economic losses of $1,000 per month.

18. Which of the following describes monopolistic competition?

A) P = MR = MC

B) There is only one seller in the industry

C) Advertising plays a key role

D) Homogenous products

19. Marginal cost pricing for an information product

A) would cause the firm to earn economic profits.

B) would allow the firm to break even.

C) would cause the firm to expand output to increase economic profits.

D) would cause the firm to experience economic losses.

20. If a firm produces an experience good, its mode of advertising will be

A) not to advertise.

B) direct advertising.

C) persuasive advertising.

D) none of the above.

21. There is no incentive for additional producers of an information product to enter the industry when the price charged for these products by each firm already in the industry is equal to

A) average total cost.

B) average fixed cost.

C) marginal cost.

D) average variable cost.

22. A monopolistic competitor in long-run equilibrium is like a perfect competitor in that

A) zero economic profits are made.

B) price is greater than marginal cost.

C) price equals marginal cost.

D) both produce at the minimum points of their average total cost curves.

24. The demand curve for a monopolistically competitive firm is

A) elastic because the products produced are homogeneous.

B) inelastic because of barriers to entry.

C) elastic because of product differentiation.

D) inelastic because of the profit maximizing behavior of the firm.

25. Which of the following statements is true about the economic profits earned by a monopolistic competitor firm in the long run?

A) Economic profits can be positive since firms have some degree of monopoly power.

B) Economic profits will tend towards zero since positive profits will attract new firms into the industry.

C) Economic profits will be positive since the firm has a downward sloping demand curve.

D) Economic profits can be negative since there is so much competition in the market.

26. A search good is a product

A) that an individual must consume before the quality can be established.

B) with qualities that consumers lack the expertise to assess without assistance.

C) with characteristics that enable an individual to evaluate the product's quality in advance of a purchase.

D) that emphasizes the features of its product.

Part 2.

ECO 202 Assessment Problem: In this essay you will be asked to reflect the following issues using the supply and demand model.

1. There are two important inputs in the production of lattes: coffee beans and labor from workers at the coffee shop. a. Workers need to make a decision about how much time to spend working and how much time to spend doing other things. What factors affect the decision of a worker and how do these things affect the price of lattes? Rubric item 1. Demonstrate the knowledge of basic elements and concepts of microeconomics How does the following concepts affect price of lattes Microeconomic factors

1. Opportunity Cost

2. PPF with graph

3. Marginal cost and marginal benefit

4. Comparative advantage and absolute advantage

5. Price controls- price floor,

6. Explain with graph surplus in labor market if minimum wages is above equilibrium wages

7. Benefits, tuition and retirement plans

8. Consumer preferences Rubric item

2. Identify economic resources and their use

a. Natural resources

b. Human resources labor, education, skills

c. Technology

d. Entrepreneurship

b. Suppose a drought strikes the major coffee growing regions of Brazil. Describe the effect of the drought on the price and quantity of lattes in the context of the supply and demand model.

Explain with graph 1. Demand and supply, equilibrium price and output 2. Increase and decrease in demand 3. Increase and decrease in Quantity demanded 4. Increase and decrease in Supply 5. Increase and decrease in Quantity supplied 6. Explain Increase /decrease in supply of coffee beans due to drought with a graph 7. Effect on price and quantity demanded and supplied of coffee beans 8. Are coffee beans and latte complementary goods or substitutes 9. Cross price elasticity definition 10. Effect on price and quantity demanded and supplied of lattes

2. Now consider the local coffee market more broadly. Explain how the output decision made by a particular coffee shop differs under each of the four market structures: competition, monopoly, oligopoly, and monopolistic competition.

3 Differentiate production under pure competition, monopoly, oligopoly and monopolistic competition

1. Draw a graph. Label it and explain all types of costs i. Explain Law of diminishing marginal returns ii. Economies of scale iii. Short run and long run curves 2. In context of local coffee market, explain the features of pure competition, monopoly, oligopoly and monopolistic competition 3. Draw graphs of pure competition, monopoly, oligopoly and monopolistic competition and label it. 4. Discuss the output and price decision under pure competition, monopoly, oligopoly and monopolistic competition and label it.

Section B.

Answer the following questions

er/Downloads/Introductory%20Email%20Assignment%20.pdf Profile & Instructions: Assume you are a salesperson for a Hamilton-based company that designs and implements web sites for businesses. Assume that you have identified, researched and qualified a new prospect for your web site design services, and have learned the following about this prospective customer The prospect's company is named Lawn & Order Landscaping, and they provide residential and commercial outdoor landscaping services in Hamilton. Lawn and Order is a small but growing company and is owned and operated by David Lain. You have seen many of their crews working in the Hamilton area, which suggests the business is doing well, and you can see that their services are highly rated (5 stars) on customer review web sites. Lawn and Order currently has a web site, but it is just a single page and is poorly done. By contrast, they are running a radio ad that is professional and effective, as is the Lawn and Order company signage and sales literature that you have seen in the market. Lawn and Order recently won a Hamilton Spectator award as Top Landscaping Company in the Hamilton area, and has been recognized by Homestars.com (a home improvement services review web site), as a "Top Pick" in the landscaping category. The company you work for, Dynamic Web Creations, distinguishes itself by offering high quality web sites at affordable prices, and has successfully designed and launched over 20 web sites in the past 2 years. The company has several happy customers in the home services industry and specializes in designing mobile web sites. Dynamic Web Creations was recently ranked by Digital Business Magazine as the #1 web site design company in Ontario for Value and Design Capabilities. Your task: I Write an introductory Pre-Approach email to the owner of Lawn and Order Landscaping, David Lain. The goal of your email should be to introduce yourself and your company, generate interest, and secure a follow-up phone call. Be sure to follow the format and advice referenced in the 'Building Customer Relationships Chapter 7 slides and discussed in class,General Description: This assignment tests the student's ability to write a professional introductory business email to a prospect as follows: You are a B2B sales rep. The company you work for specializes in e-commerce - high end web development. (See complete profile and instructions at the end of this assignment). Your key objective is to secure an introductory telephone call or meeting with a prospective customer that you've never met or spoken with before. Through your initial research, you have identified a company that you feel would be a great prospect (See complete profile and instructions at the end of this assignment). Compose your email to the buyer/contact at this company designed to meet the above objective. Evaluation Criteria: Be sure your email contains the following elements to ensure the best possible success: 1. Subject (2 marks) 2. Introductory statement (3 marks) 3. Benefit statement (5 marks) 4. Ask / Call to action (5 marks) 5. Your contact information (include name, Student # and class) (2 marks) 6. Grammar / spelling and creativity (3 marks) Hint: Be sure to follow the format and advice referenced in the Top 10 Email Do's and Don'ts slides referenced in the Chapter 7 PowerPoint and discussed in class. This can be found the Chapter 7 Module in Canvas. Expected format: Submit this email (in word document format) to the Canvas folder labelled Introductory Email Assignment. Please type your answers directly into a new document (do not include the full assignment questions in your document or it will be flagged by the Originality Checker). Your email should be no more than one page in length. Late submissions: Will receive a grade of zero, unless exceptional circumstances have arisen that have prevented on-time submission and the instructor has been notified in advance