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Questions and Answers of
Organization Development
When calculating an optimal Pigouvian tax, you set marginal social cost of production equal to marginal social benefit. What assumption does this make about the benefits provided by the government
Consider the method for finding Nash equilibria detailed in 8.c. Explain whythis method works for finding Nash equilibria. How do we know that a Nashequilibrium found by this method will be
Consider the following demand schedule. Using this demand schedule, calculatemarginal revenue for each quantity Q = 2 to 4.P Q1)100 l 90 2 8O 3 7O 4 B. If you ask the average person why companies
Marginal revenue MR and marginal cost MC are the additional revenue and cost(respectively) added when the amount produced increases by one. With that inmind, add and fill in MR and MC columns for the
The chapter describes how to solve for the effect of a tax on a market. But what about a subsidy? A subsidy is when the government pays the producer or consumer for each unit they produce.
In the market for health care, the price P is set by outside forces rather thanbeing negotiated between consumers and producers. Consumers as a whole havea shared marginal value curve M V,which is a
Provide an intuitive explanation for why goods with very close substitutes havea more elastic demand.B. When we are using a good’s elasticity to label it in some way (elastic, inelastic, luxury,
If someone tried to sell you a dollar for any price above a dollar, you wouldcertainly turn the person down. But at a price of exactly $1, you’d be willing tobuy any number of them, since they’re
Every day after class, Mr. Dabble’s third grade class must clean the room. Somekids sweep and some kids put things away. Everyone thinks that sweeping ismore fun, and so he lets the best-behaved
Andy and Amy are fishing in the same pond this year and next year. There are20 fish in the pond now, and every fish left un-caught after this year will turninto 1.5 fish next year. Assume that, at
Streetlights are a public good. Dave receives a marginal benefit of MB = 10 — Qfrom each streetlight, and Gary receives a marginal benefit of MB 2 20 —2Q.The marginal cost of a streetlight is MC
For each of the following goods, determine if they are public, private, common, or artificially scarce (club) goods:a . Lighthousesb. Online newspapersc. A shared serve-yourself platter of dinner
Steve and Darryl live together. Steve plays his music way too loud in the momings, waking up Darryl. Steve values the ability to play his music loudly at $50per day, and Darryl values sleeping in at
Because of the trash that they tend to produce, soda cans provide a negativeexternality. Inverse demand and supply are P = 40 — Q0 and P = 10 + 2QS.Demand and marginal social benefit are the same,
Consider the market from Question 1.a. Could this extemality problem be solved with: (l) a Pigouvian tax, (2) aPigouvian subsidy, or (3) neither?b. If you selected (1) or (2) in parta, solve for the
The production of a certain kind of hot sauce puts spicy capsaicin molecules inthe air, which can cause eye pain and damage to people who live near the factory.Inverse demand and supply for this hot
Consider the game table:Firm B Lot Little Hi h Price $10m for A $2m for A g $10m forB $15m forB ' Firm A ' Low Price $15m for A $5m for A$2m for B $5m for Ba. Find the Nash equilibrium.b. Explain
Use backwards induction to find the Nash equilibrium in the game in Question 6.9 Consider a game in which a Market Leader first decides whether to Lobby for anew law making it more difficult to
Use backwards induction to find the Nash equilibrium in the game tree below:New Competitor Enter hAarket AAarket Leader[Dorrt . [Dot Raise Raise . Pnce Prlce Essa £232.? %$1%an)g$8%a)
Consider a game in which Chad has a five-dollar bill that he can keep to himself or give to Raven. If he gives the bill to Raven, then it triples in value to be worth$15. Raven then decides whether
Consider a game between theater companies Shakes and Bardtron. Each decides which actor to offer the part of Hamlet. If they both approach the same actor, they’ll fight, scaring the actor away and
Find the Nash equilibria in the game below in which two oligopoly firms aredeciding whether to produce a lot or a little. The more produced overall, thelower the price will be. But each firm wants to
Consider the game table you drew in Question 1.Solve for the Nash equilibriain this game.
Solve for Nash equilibria in the game below in which Fahad and Jacques will decide whether to drive on the left or the right side of the street.Jacques Left Right Left 100 for F 0 for F 100 for J O
Draw the game table for a game played between two competing oligopolies, Tape Source and Place for Tape. Each must decide whether to invest in R&D.Any innovation will be easily copied and shared by
Movie theaters charge two different prices for tickets—one for seniors and onefor everyone else. If seniors have lower marginal valuations than everyone else, and the price for seniors is still
Consider the market for online advertising, which is run by a monopolist whohas enough information on consumers that it can engage in perfect (first-degree)price discrimination. If demand for online
Consider the market for hamburgers, which is a market in monopolistic competition. In this market, one of the producers is Barry’s Burgers. The current demandfunction for each firm in the market is
Draw a graph of a natural monopoly such that the profit-maximizing quantity isQM= 500.Then, show on the graph what AC would be if the firm instead produced QM= 250.Finally, describe how the
Consider the market monopolized by Philly Bells in Question 3.Calculate thedeadweight loss generated by the monopoly, relative to efficient production.Consider the market for solar panels, which are
Billboards are provided in a market run by a monopoly, ClarityStream. Thedemand for billboards is P = 1600 — 20QD.a. Calculate the function for ClarityStream’s marginal revenue.b. Calculate
Draw a long-run average total cost curve with four short-run average cost curvesnested inside of it. Label the four average cost curves SRAC], SRACZ,SRAC3, and SRAC4, where the higher numbers
Draw two graphs. On the right, draw a graph of an individual firm’s MC and AC.On the left, draw a supply and demand curve with an equilibrium price such that the individual firm makes a profit.
Draw a graph of an individual competitive firm’s MC, AC, and AVC curves.Label the price at which the firm makes zero profit. Then, label the price regionat which the firm makes a profit, the price
The market for bowls is competitive. Inverse demand is P = 22 — 2QD and inversesupply is P = 2 + 2Q5. Each firm’s marginal cost is MC = 6Q and average cost isAC= (24/Q) + 3Q.a. Calculate the
Sandals are produced in a competitive market, and the market price is P = 50.One sandal producer has MC = lOQ and AC= (25/Q) + 5Q. Calculate the firm’sprofit-maximizing quantity and their profit.
Considera firm for whichMC = 4Q, TC= 1.2+ 2Q2, and the market priceisP* = 12.Calculate the profit-maximizing quantity and the firm’s profit. Thenmake a graph with demand, MC, and AC, labeling the
Draw a graph with MC, AC, AVC, and AFC curves. Draw them such that the firmshuts down in the long run at any price below 10, and shuts down immediately at any price below 8.Label these prices.
Using the total cost function TC = 36 + Q2:a. Calculate the function for AC by dividing TC by Q.b. Calculate the function for AC by calculating AFC and AVC and adding themtogether.c. Calculate the
Andy is a TV producer figuring the price of producing a certain number of episodes of his TV show. If Q = 0, TC = 10 (all costs are in millions of dollars). If Q =1, TC=12.IfQ = 2, TC=15.IfQ = 3, TC:
In each of the following descriptions, describe the firm’s fixed costs and variablecosts.a. A bookmaker has a lot of large printing presses in a warehouse she rents, andshe buys paper and pays
In Nigeria, the inverse demand for cashews is P = 20 — QDand the inverse supplyis P = 4 + Q5. In the rest of the world, cashews sell for P = 16.Graph the market for cashews in Nigeria when it has
In an attempt to reduce the ability of bacteria to become immune to antibiotics, the government has imposed a quota on antibiotic production below the equilibrium quantity, giving out a small number
In the market for headphones, inverse demand is P = 90 — QDand inverse supplyis P = 15+ 2QS. In a bid to prevent hearing loss, the government imposes a tax of T per unit. Calculate how much more
Consider the tax levied in Question 3.a. Calculate the tax incidence using PDand PSfrom Question 3.b. Who pays a larger share of the tax: consumers or producers?c. Use demand and supply elasticity to
In the market for statues, inverse demand is P = 250 — 3QD and inverse supply isP = 50 + 2QS. The government implements a tax of T: 10.Calculate the actual quantity traded, the price paid PD, the
Fighting obesity, the government has put a tax on cake of $3 per cake. Inthe market for cake, inverse demand is P = 36 — ZQD and inverse supply isP = 6 + Q5. Graph the market with the tax,
Consider the market for flowers. Inverse demand is P = 50 — QD and inverse supply is P = 10 + Q5. Out of a concern for the well-being of flower growers, thegovernment implements a price floor of p
In the market for MP3 players, inverse demand is P = 400 — ZQD and inversesupply is P = 100 + Q5. However, the government has decided that it’s veryimportant that MP3 players have a price of P =
In the market for apples, inverse demand is P = 80 — 3QD and inverse supply isP = 20 + Q5. However, due to a quota on the production of apples, the actual number of apples produced is 20.Graph this
In the cereal market described in Question 8, inverse demand is given byP = 30 — 2QD and inverse supply is given by P = Q5. If QT = 8, then calculateP1, P2, and deadweight loss.
A pair of sunglasses will typically cost Krista $100, but she has two coupons(which must be used on different pairs): one for $60 off and another for $20 off.The first pair she buys will bring her
In the market for water bottles, market demand is P = 90 — 3QD. Two of theconsumers in this market are Leslie, who values a water bottle at 30, and Steve, who values a water bottle at 15.The price
In the market for razors, the demand curve is given by P = 44 — 2QD. If thegoing price of razors is 20, then calculate the consumer surplus in the market for razors. Rudy is one consumer in this
Using the set of supply and demand curves below, draw a marginal cost andmarginal value table at the quantities of 6, 7, and 8.
Consider Susan from Question 1..The going sale price for a pizza is $17.a. Draw Susan’s supply curve with the producer surplus shaded inb. Calculate her producer surplus.
Dean likes to attend rock shows and also likes to spend time at home watchingTV. He receives $0 in total value from 0 rock shows, $100 from one rock show,$175 from two rock shows, and $185 from
Susan makes pizzas in a small cart that she pushes around town. But she runs out of space in that cart pretty quickly, so her costs ramp up fast. Her total cost for making zero pizzas is $0, one
You work in the glass bauble industry, where the equilibrium price and quantityare currently P* = 1 and Q* = 10.You know that, soon, due to a glass shortage, supply will be shifting to the left. Your
The graph below depicts five different demand curves all going through the samepoint. Label them D1 through D5, with D1 as the perfectly elastic curve, andgetting more inelastic from
Frank’s consumption of coffee just increased from 1 cup per day to 3.You thenlearn the cause for this change, which is one of the reasons listed in a—e below.For a—b,calculate Frank’s income
Calculate the price elasticity of demand for each of these demand curves at QD= 4 and again at QD= 8:a. P = 40 — 2QDb. P = 24 — QDc. P = 10 — QDd. P = 25 — 3QDe. P=120—10QDf. Is there a
The market for rubber bands was in equilibrium at P* = 12 and Q* = 36.Then, the government put a price restriction into place, pushing the price up to P = 18.As a result, quantity supplied became Q5
The price of a photo frame just jumped from P= 4 to P= 6.Calculate the elastic—ity of demand for each of the following people:Niall went from QD= 6 to Q0 = 4.John went from QD= 12 to QD= 6.Daron
Choose either the standard method or the midpoint method. Then, calculate thepercentage change from A to B in each of the following cases:FromQA=4to QB=6 From PA= 10 to PB= 20 From QA= 9 to Q3: 15
Find the market equilibrium price and quantity for each of the following sets of supply and demand curves:P=20—QD,P=2+2QS QD=120—2P, QS=4O+2P P=77—2QD,P=11+Q5 P=70— 1.5QD,P=20+.5QS P = 10 +
Graph the following supply and demand curves, being careful to find and label the y-intercepts, and the x-intercept for demand. Calculate and label the market equilibrium price and quantity. Inverse
Anne (supply given by Question 1) sells her patio chairs to Case, who values hisfirst chair at $60, the second at $30, and the third at $10. Calculate surplus or shortage if the price is P = $35, and
For each of the following, determine whether supply or demand (or both, or neither) will shift, what direction each shift will be, and whether equilibriumquantity and price will rise, fall, stay the
For each of the following scenarios, determine whether supply or demand (or both, or neither) will shift as a result, and what the direction of each shift will be:a. (Market for cars) Sheet metal
Draw the supply and demand curves for soap on the same set of axes. Label thecurves to show that: at a price of P = 4, you will see Q5 = 8 and Q0 = 2, and at aprice ofP = 1, you will see Q5 = 2 and
Kate values her first ice cream cone at $6, her second at $4, and her third at $2.Mike values his first cone at $4 and his second at $2. Penelope values her first three cones at $6 and her fourth at
Patch has a demand curve for books that can be described by the functionQD = 1.6 — 2P. Draw Patch’s demand schedule at the prices P = 1, 2, 3, and 4.Then, draw Patch’s demand curve using the
Anne likes to make patio chairs out of wood in her spare time. Her marginal cost of making the first chair is $10, the second chair is $30, and the third chair is $40.Draw Anne’s supply schedule
Every spring, a bunch of temporary migrants who aregreat at harvesting cacao, but useless at coffee, move to Bayo (PPF2). Everysummer, they are joined by more temporary migrants who are good at
Belly Steaks is a large restaurant.In an hour, they can produce 300 plates of foodor 150 desserts. Tooth Sweets is a bakery. In an hour, they can produce 50 platesof food or 100 desserts. Draw their
Take Sam and Amy from Question 1 above. Graph their shared production possibility frontier if they have 10 minutes of time available. You may find it helpful to do Question 4 first.
Dingo the Clown is planning his six-minute stage act. He is trying to divide histime between jokes and magic tricks. Each joke takes 30 seconds to tell, andeach magic trick takes two minutes. Draw
It takes Ted 20 minutes to wax a car, or 60 minutes to wash one. It takes Tom 15minutes to wax a car, or 30 minutes to wash one. What is each man’s opportunitycost of washing a car, and who has the
Daphne can solve two mysteries per week, or write six news articles. Velma cansolve four mysteries per week, or write eight news articles. For each, calculatethe opportunity cost of solving one
In one minute, Sam can type 120 words or read 2 pages. In one minute, Amy cantype 80 words or read 4 pages. For each, calculate the opportunity cost of readingone page, and determine who has the
How do the opportunities you have identified illustrate the values and ethical beliefs of organization development identified in this chapter?
What organizational, team, and individual problems can you identify? What opportunities for organization development work do you see?
What is it like to work in this environment? How do you respond to Julie as a leader? Compare Julie as a leader with some of the descriptions of leadership styles provided in Chapter 2.
What factors do you think contribute to making a successful change?
What could have been done differently to make this change successful?
What do you think are the greatest differences between being an internal and external organization development practitioner?
How would you clarify the OD practitioner role in an initial client meeting
How would you describe the organization development (OD) process to a potential client?
Was a survey a good choice for a data gathering method in this case? Why or why not?
What do you think was done well in the administration of the survey in this case? What do you think should have been done differently?
What are the advantages and disadvantages of your data gathering choice(s)? Include a rationale and proposed timeline for your approach and any details about the data gathering method itself,
What data would illustrate whether these underlying problems are occurring? Which method of data gathering would you use and why? (Consider using the method of analysis shown in Table 7.2.) Write a
What are the presenting problems? What do you think may be any underlying problems? Which of these underlying problems is most likely, in your view?
What is the client requesting? What goal does the client have for this project?
What, if anything, could the consultants have done differently to make the conflict apparent earlier?
Why do you think the conflict was not discovered in the data gathering phase?
How would you structure the feedback meeting with Nancy? Which themes would you present and why?
Which method do you think was more effective?
Try organizing the data a different way. Did you notice anything different from the first time you analyzed the data?
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