1. Explain the equimarginal principle

2. Describe and explain a monopolist’s output decision.

3. For a firm that doubles its workforce and adds a second shift at its factory, production ___ (is/is not) subject to diminishing returns, so marginal cost is ______.

4. You want to determine the profit-maximizing quantity for a monopolist. You can ask the firm’s accountant to draw the firm’s revenue and costs curves, but each curve will cost you $1,000. From the following list, indicate which curves you will request: average total cost, average fixed cost, average variable cost, marginal cost, demand, marginal revenue.

5. List and explain the characteristics of monopolistic competition.

6. Explain why a price-fixing cartel is difficult to maintain.

7. Put in plain words the concepts of adverse-selection and moral hazard.

8. Explain the consequences of a thin market.

9. Clarify the pros and cons of the free-rider problem.

10. Logically describe the possible outcomes of the median-voter rule

11. Give explanation of how wages are determined in competitive labor markets and explain why wages differ from one occupation to another.

12. Evaluate the distribution of income in the United States and issues relative to inequality