There is a duopoly (two-firm control) over the local market for widgets.  The marginal cost of production to each firm is given by the equation MC = 2q. Average costs are given by the equation AC = 30 – 2q. Since the market for widgets is not perfectly competitive, marginal revenue decreases with the quantity of widgets sold: MR0 = 20 – 2q. Finally, market demand is given by the equation q0D = 20 – p.   How many widgets does each firm produce?  Set MC = MR0.  q0* = .  What price do they charge?  p0* = $. Profit is $.  Your number may be negative, in which case you should insert a single hyphen, “-” (without the quotes), before the number.   If profits are positive, a new firm enters the market.  In this case, marginal revenue per firm decreases to MR1 = 16 – 2q and demand decreases to q1D = 16 – p.  On the other hand, if profits are negative, a firm exits the market and leaves the other with a monopoly.  Marginal revenue for the monopolist increases to MR1 = 24 – 2q and demand increases to q1D = 24 – p. Now set MC = MR1 to find the new number of widgets sold by each firm: q1* = .  What price do they charge?  p1* = $. Profit is $.  Is the market stable, in the sense that no existing firms want to exit and no potential firms want to enter?

We now examine a production problem.  Consider two firms, each producing widgets, who sell in two different types of output markets.  In particular, firm PC sells widgets in a perfectly competitive output market, where there are so many firms and widgets sold that a single firm’s quantity produced does not affect the market price.  In a separate market, firm M acts as a monopolist and sees diminishing marginal revenue with higher levels of production.  Each firm produces widgets according to the same production technology.  The table below shows the number of widgets produced given some number of workers employed. # of workers widgets produced 1 12 2 23 3 33 4 42 5 50 6 57 7 63 8 68 9 72 10 75   Marginal revenue is constant for firm PC — they obtain $5 per widget sold.  Marginal revenue is decreasing for firm M — they obtain $5 per widget sold for their first 4 workers; $4 per widget for the next 3 workers; and $3 per widget for the final 3.  If the market wage is $48, firm PC should hire workers and firm M should hire workers.  If the market wage is $36, firm PC should hire workers and firm M should hire workers.  Finally, if the market wage is $18, firm PC should hire workers and firm M should hire workers.

Our final short problem involves building international trade into a model of supply and demand.  We consider what happens in the market for widgets when imports expand supply.  First, we describe the relationship between the domestic supply of widgets and the price with the equation qdomS = 3p – 10. The relationship between the demand for widgets and their price is given by the equation qD = 150 – 5p. First, solve for the market equilibrium before trade: we have p0* = and q0* = .  Total revenue for domestic producers here is obtained by multiplying the price by the quantity of domestic widgets sold: $.  . Next, we describe the relationship between the foreign supply of widgets and the price with the equation qforS = 2p. To consider the total supply of widgets, we must have qtotS = qdomS + qforS, where each part of the right-hand side is given above.  Simply add these parts together to get qtotS.  To find the new price and quantity sold after trade, set qtotS = qD.  Here, in the new equilibrium, we have p1* = and q1* = .  To calculate the quantity of domestic widgets sold after trade, plug p1* into qdomS.  Domestic suppliers are able to sell widgets here for a total revenue of $.  Foreign suppliers are able to sell widgets (obtained in an equivalent manner to domestic suppliers) for a total revenue of $.  Does trade increase or decrease revenue for domestic suppliers?  Does it increase or decrease total revenue?

Which of the following is an inhaled anesthetic?

An antibiotic which stops bacteria from replicating but does not kill them is said to be bacteriostatic.

Which condition would NOT decrease the effectiveness of lidocaine. 

Select all of the positive symptoms associated with schizophrenia.

Benzodiazepines hyperpolarize neurons by increasing the duration of open state of chloride channel when GABA is bound.

Select all of the effects caused by a general anesthetic.

Select all of the symptoms associated with diabetes mellitus.