For each of these two sections, explain what was the most important concept you learned in that lesson (and why) and please explain how the lesson could be improved.
- Complete a table for Q, Price, TC, MC, MR and profits. This time start the price at the number of P = 9 combined for Q = 1, and then reduce the price as Q increases. For costs, begin with TC = 4 at Q = 1, then you may use any numbers you like for costs. You may need to play around with the numbers to make this work out. Show that MR = MC at profit maximization. Graph MR, MC and P and show the profit maximizing level of output. (You don’t need to graph ATC and show the profit rectangle).
- During your next trip to the supermarket (Use this website for the supermarket, https://www.ralphs.com/ ) find two examples of different goods for which the market is oligopolistic. ( Please use breakfast cereals and Soft drinks) Make certain that you have chosen a good and not a brand name. Remember that several brand names compete in a market. List all the brand names (or at least four brands if there are dozens) and the parent company for each brand name (check the package carefully so that you don’t confuse brand names with the actual producer.) For each good, what is your evidence that this market is oligopolistic? (Number of producers; shelf space give to each one; identical pricing.)
- The Prisoner’s Dilemma is a famous game in game theory in which two prisoners must decide whether or not to cooperate with another, that is declares their mutual innocence. If both prisoners cooperate, that is do not confess their mutual guilt, then they both go free. If one prisoner cooperates, but the other does not, then the non-cooperating prisoner receives a lighter sentence and the cooperating prisoner is punished severely for refusing to confess. If both prisoners refuse to cooperate that is they both say the other is guilty then they both are punished, but less than if only one declared his innocence.
a. Play the Prisoner’s Dilemma at: http://serendip.brynmawr.edu/playground/pd.html Try one set of rounds for practice.
b. Design a strategy for the game. Describe it and then test the strategy in three rounds of the game. Did it work?
c. How is this game similar to the game theory we discussed in class? - Every year there are new and sometimes unexpected lawsuits against US corporations. Choose a case for study at the web site http://www.usdoj.gov/atr/cases.html
You will find many, many antitrust lawsuits listed alphabetically. Please choose two,
a) one involving any aspect of antitrust. Summarize what was the alleged violation and what happened (if anything). Please do so in your own words (that is, not cut and pasting from the site).
b) one involving a merger or acquisition (you may need to look at several to find one.) Again, summarize what was the alleged violation and what happened (if anything). Please do so in your own words (that is, not cut and pasting from the site). - One good measure of learning is the ability to ask good questions. That is: what is it that you would like to understand better about one of the concepts we’ve studied in economics?
a) Specify the question: what is it that you would like to understand better about one of the concepts we’ve studied in economics?
b) Why don’t you fully understand this concept?
c) Why is it important for us to fully understand this concept?
