Refer to the 2 previous questions.  If you were the owner of the firm, would you continue to produce at an output of 29, or would you stop production altogether?  Whatever your answer is, explain why.

Answer questions A and B: a. If you are China, what is good about you devaluing your own currency? b. If you are China, what is bad about you devaluing your own currency? 

Perfect Competition: in order to maximize Profit, the firm’s Selling Price and Quantity produced is at MR = MC. In a Monopoly (see graph below, which is a Monopoly), how does the firm know what Price to charge and what Quantity should be produced, in order to maximize Profit?  Explain the process.

Assume there are 2 factors (labor and capital) in a company.  Their MPP to price ratios look like this:   MPP (Labor) is 35                MPP (Capital) is 80 ————————-   

Give an example of the Income Effect (tell me a story).

Solve for MFC at A, B, and C. Use this formula:  MFC = change in TC / change in Quantity of Factor X Qty of Factor X Price of Factor X Total Cost Marginal Factor Cost (in $) 0 $4 $0 N/A 2 $4 $8 A 4 $4 $16 B 6 $4 $24 C

Why is the Market Supply of Labor curve upward sloping?  This question is related to the 2 previous questions.  

Go to the previous question.  Look at the column that says Qty of Factor X.  At 4, what is the interpretation of its MRP?

Solve for the MRP at A, B, and C. Use this formula:  MRP = change in TR / change in Quantity of Factor X Qty of Factor X Qty of Output, Q Product Price Total Revenue (P x Q) Marginal Revenue Product (in $) 0 0 $4 $0 N/A 2 2 $4 $8 A 4 10 $4 $40 B 6 20 $4 $80 C

Give an example of the Marginal Productivity Theory (tell me a story).