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Q1 Mohamed produces Toys in the perfectly competitive Toys market. Fill in the missing values in the following table: (5 marks) Suppose the equilibrium price in the Toys market is $30. How many Toys should Mohamed produce? How much profit will he make? (1 mark) If next week the equilibrium price of Toys drops to $15, should Mohamed shut down? Explain. (1 mark) Output per week Total Cost FC VC AFC AVC ATC MC 0 $100 1 150 2 175 3 190 4 210 5 240 6 280 7 330 8 390 9 460 10 540 Answer: Q2 A publisher initially prices both hardback books and paperback books at $20 per book. The hardback version comes out first, followed two months later by the paperback version. The publisher initially sells the same number of hardbacks and paperbacks (100 each). Each book costs $2 to produce. a.Complete the following table. (2 marks) - Price Quantity Total Revenue Total Cost Profit Hardback $20 100 Paperback $20 100 Total 200 b. The price elasticity of demand for hardback (eager) buyers is 0.50, and the price elasticity of demand for paperback (patient) buyers is 2.00.Suppose the publisher increases the price for hardbacks by 10 percent and decreases the price of paperbacks by 10 percent. Complete the following table. (2 marks) Price Quantity Total Revenue Total Cost Profit Hardback $22 Paperback 18 Total c. Does price discrimination increase or decrease the publisher's profit? (1 mark) Answer: Q3(3 marks) Suppose a firm producing baseball, it is operating in the short run. The price of baseball is $5, the hourly wage is $12, and each baseball requires $1 worth of material. The firm has experimented with different workforces and the results are shown in the first two columns of the following table. 1. Fill in the blanks in the table. 2. Is it sensible to continue to operate at a loss with 14 workers? 3. Would it be better to operate with 15 workers? Explain, using the marginal principle. Workers Baseball Labor Cost Material Cost Variable Cost Total Revenue Marginal Cost 14 56 15 60 Answer:)) Requirements: 1200-1600 College of Administrative and Financial Sciences Assignment 2 Microeconomics (ECON 101) Deadline for students: 04/02/2023 For Instructor’s Use only General Instructions – PLEASE READ THEM CAREFULLY The Assignment must be submitted on Blackboard (WORD format only) via allocated folder. Assignments submitted through email will not be accepted. Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page. Students must mention question number clearly in their answer. Late submission will NOT be accepted. Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions. All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism). Submissions without this cover page will NOT be accepted. Assignment Questions Q1 Mohamed produces Toys in the perfectly competitive Toys market. Fill in the missing values in the following table: (5 marks) Suppose the equilibrium price in the Toys market is $30. How many Toys should Mohamed produce? How much profit will he make? (1 mark) If next week the equilibrium price of Toys drops to $15, should Mohamed shut down? Explain. (1 mark) Answer: Q2 A publisher initially prices both hardback books and paperback books at $20 per book. The hardback version comes out first, followed two months later by the paperback version. The publisher initially sells the same number of hardbacks and paperbacks (100 each). Each book costs $2 to produce. a. Complete the following table. (2 marks) - b. The price elasticity of demand for hardback (eager) buyers is 0.50, and the price elasticity of demand for paperback (patient) buyers is 2.00. Suppose the publisher increases the price for hardbacks by 10 percent and decreases the price of paperbacks by 10 percent. Complete the following table. (2 marks) c. Does price discrimination increase or decrease the publisher's profit? (1 mark) Answer: Q3 (3 marks) Suppose a firm producing baseball, it is operating in the short run. The price of baseball is $5, the hourly wage is $12, and each baseball requires $1 worth of material. The firm has experimented with different workforces and the results are shown in the first two columns of the following table. 1. Fill in the blanks in the table. 2. Is it sensible to continue to operate at a loss with 14 workers? 3. Would it be better to operate with 15 workers? Explain, using the marginal principle. Answer: