Question 01

The following incomplete tables shows two competitive firms' various costs of producing output. a) Complete the table for FIRM A

b) Complete the table for FIRM B

c) Assume the market for this product is perfectly competitive and the current market price is $28. Determine the quantity produced by each firm and their economic profit/loss. Explain your answer.?d) What will happen to this market in the long run and why??e) Now suppose that the market price falls to $16. Do both firms make economic profit? Explain why. f) If one or both of them makes an economic loss, would they shut down temporarily?

g) Assume these two firms now are actually two factories of one corporation, and the corporation can operate either one or the other at a time. Using the two tables above, determine which factory should be in operation to produce up to a certain level of output. What is this level of output??h) Explain your answer to (g).

Question 02 - Theory Question

Assume that the world market for wheat is perfectly competitive.

a) Demonstrate the world market for wheat in long run equilibrium? conditions. The market for wheat is to be on the left, and a representative farm (firm) is to be on ?the right.

b) Explain and discuss the long run conditions above.

c) Illustrate on this diagram, the short run impact of a growing world population.

d) Explain and discuss your answer to (c).

e) Re-draw your diagram in (c). Illustrate on this new diagram what would happen in the long run.

f) Explain and discuss your answer to (e).

g) Explain and discuss what could prevent your answer to (f) from occurring and why.

h) Explain and discuss what strategies a firm in this situation could adopt to retain what it is losing?in (e) and (f).

Question 03 - Application Question

Assume that the Sydney clothing market is monopolistically competitive.

a) Illustrate a representative firm in monopolistic competition in long run conditions.?Assume that clothing stores in Macquarie Centre sign 24 month leases with the shopping centre. Further assume that there is a clause in the lease contract that allows Macquarie Centre to increase the monthly rent every 6 months of a signed 24 month lease, in line with market conditions. Even if the rent is re-adjusted (in line with market conditions every 6 months) according to the contract, the lease term still remains at 24 months.

.  b) Re-draw your diagram from(a). Show on this new diagram the immediate impact of an increase rent as described in the situation above.

.  c) Explain and discuss your answer to (b).

.  d) Explain and discuss the short run decision - making process of the firm, given the situation in(b) ?and (c).

.  e) Re-draw your diagram in (b). Show on this new diagram the long run impact.

.  f) Explain and discuss your answer to (e).

Assume that the Retail Store Workers' Union successfully bargains for an increase in casual staff wage rates, despite no proven improvements in worker productivity.

.  g) Re-draw your diagram in(a).Show on this new diagram the immediate impact of an increase in? casual staff wage rates.

.  h) Explain and discuss your answer to (g).

Question 04

. a) Research and explain why 'The Star' (StarCity) has been a monopoly in Sydney for several years. You must quote relevant dollar figures, as well as relevant dates, and cite your sources.

. b) Using half an A4 page, illustrate with a diagram of a monopoly, the economic position of 'The Star' over recent years. Use researched data in your diagram.

. c) Research and describe how the Sydney casino industry is currently changing and will be changing over the next few years. You must quote relevant dollar figures, as well as relevant dates, and cite your sources.

. d) Apply economic theory to explain and discuss the changes in (c).

. e) Re-draw your diagram in (b). Show the impact of the events in (c) and (d) on this new diagram.

. f) Explain and discuss your answer to (e).

. g) Research and explain the differentiation that the newplayer is offering. Apply economic theory ?to explain and discuss this differentiation.

. h) Consider the aforementioned Sydney players on a broader stage - across Australia, as well as ?over the South East Asian region, such as Singapore and Macau. If we consider the casino industry from this angle, what market structure best describes this industry? Explain and discuss your answer.