Refer to Question 5.  How much money would this firm lose if it did not produce any output?  Formulas to help you out: TC = TFC + TVC TVC = Q x AVC Price Show your solution.  No solution, no credit. 

Why does a Perfectly Competitive firm sell at the Equilibrium Price, whether 2 goods are produced, or 1,000,000 goods are produced? Use any 1 of the 4 assumptions that Perfect Competition is built on to explain your answer.

In Perfect Competition, Price is always equal to Marginal Revenue.  Create as an example a Mathematical table wherein Price is always equal to Marginal Revenue.  Here are the formulas that you will need:     Total Revenue = P x Q (that’s Price time Quantity) Marginal Revenue is = change in TR / change in Q

What would the Lorenz Curve look like if there was perfect Income Equality among all Households?

A politician says “the middle class in this country is getting smaller and smaller”.  Tell me a story or give me an example that shows this is not always true (or at least, that the statistics are misleading).

  Are the number of Households equal per Quintile (see image above)?  You must explain your answer, don’t just say equal or not equal.

Even if we lived in a perfect world (for example, a world without discrimination), why would Income Inequality still exist? Explain your answer.

  What is the problem if the government decides to regulate production at Q1?

Using the old method to solve for the Herfindahl Index, why would the government frown upon the scenario below? Firms Market Share A 19 B 18 C 18 D 18 E 9 F 9 G 9

A Price Ceiling is meant to help consumers.  Why is it placed below the Equilibrium Point?