Question 1 (2 points)

Figure: Payoff Matrix II for Jake and Zoe:

		Zoe
Jake	Competitive Strategy	High Price	Low Price
High Price	Jake earns=$1,000; Zoe earns = $1,000	Jake earns= $200; Zoe earns = $1,500
Low Price	Jake earns= $1,500; Zoe earns = $200	Jake earns= $800; Zoe earns = $800

Payoff Matrix II for Jake and Zoe refers to two producers of slushes in their tourist town. Each has two strategies available to it: a high price and a low price. The figure shows the profit per week earned by their two firms. The dominant strategy for Zoeis to:

Question 1 options:

1)	always adopt the same strategy as Jake

2)	Zoe does not have a dominant strategy

3)	always charge alow price

4)	always charge ahigh price

Question 2 (2 points)

Lilly is the price-taking owner of an apple orchard. The price of apples is such that Lilly is making negativeeconomic profits (economic losses). In the long run, Lilly should expect

Question 2 options:

1)	lower apple prices due to the entry of new firms

2)	lower apple prices due to the exit of some existing firms

3)	higher apple prices due to the exit of some existing firms

4)	no change of apple prices due to the entry/exit of firms

Question 3 (2 points)

Figure: Payoff Matrix II for Jake and Zoe:

		Zoe
Jake	Competitive Strategy	High Price	Low Price
High Price	Jake earns=$1,000; Zoe earns = $1,000	Jake earns= $500; Zoe earns = $1,200
Low Price	Jake earns= $1,200; Zoe earns = $500	Jake earns= $800; Zoe earns = $800

Payoff Matrix II for Jake and Zoe refers to two producers of slushes in their tourist town. Each has two strategies available to it: a high price and a low price. The figure shows the profit per week earned by their two firms. The Nash Equilibrium in the figure is reached when:

Question 3 options:

1)	Zoecharges a high price andJake charges a low price

2)	both firms charge a low price

3)	Jakecharges a high price andZoe charges a low price

4)	both firms charge a high price

Question 4 (2 points)

Mikail's perfectly competitive camera memory card-producing factory is making positive economic profits. If the price of memory cards is $10, Mikail's output is 3,000 cards a month, and his monthly average total cost is $7, what are his monthly profits?

Question 4 options:

1)

$21,000

2)

$9,000

3)

$30,000

4)

$7,000

Question 5 (2 points)

Table: Total Product of Labor at Debbie's Bakery

Quantity of Labor (workers)	Total Product of Labor (cakes per worker)
0	0
1	3
2	10
3	16
4	21
5	25
6	28

Debbie owns a bakery and can hire workers to produce cakes selling in a competitive output market at $10 each. The table Total Product of Labor at Debbie's Bakery shows the relation between the number of workers and the number of cakes produced. What is the value of the marginal product for the third worker?

Question 5 options:

1)

$160

2)

$60

3)

6 cakes

4)

16 cakes