Problem Sets

Lab Reports

Experiment1--The Apple Market

Experiment 5--The Minimum Wage

Experiment 4--Prohibition

Experiment 10--Paper Airplane Factories

Experiment 8--Entry & Exit

Experiment1--The Apple Market
Should be complete by the beginning of class on Wednesday, June 5^th.

Questions 1.1 through 1.7 in the Experiment Guide.

Experiment 5--The Minimum Wage
Should be complete by the beginning of class on Thursday, June 6^th.

All Questions in the Experiment Guide.

For Question 5.5, ignore their hint (as we do not use the same text), and look to the "Tip For Employers" right before the Warm Up Exercises. For each part, as yourself, would I profit from hiring one worker? If the answer is yes, could you make a larger profit from hiring a second worker?

Experiment 4--Prohibition
Should be complete by the beginning of class on Tuesday, June 11^th.

All Questions in the Experiment Guide.

Experiment 10--Paper Airplane Factories
Should be complete by the beginning of class on Wednesday, June 19^th.

All questions from the Experiment Guide.

Plus the following:

a. Assume that the "fixed cost" of the company pen, company truck, and shipping container is $25 all together. If the wage per worker was $5, calculate total cost in each session. Draw the total cost curve for paper airplanes (drawn against "Total Output Per Firm").
b. Calculate the MC and ATC, AFC and AVC using the "Total Output per Firm" and TC numbers that you calculated in part a. Graph MC, ATC, AFC, and AVC curves on the same set of axes (but on a separate set of axes than in part a).

Experiment 8--Entry & Exit
Should be complete by the beginning of class on Thursday, November 19

All questions in the experiment guide.

Some hints:

Use the data in Table 8.2 to draw your demand curve (it is the same for every session and IS a step-function).
Use the number of firms in each session to determine where your supply curve should lie.
Also when drawing supply, remember that Fixed Costs are "sunk costs" to these firms. . .what is the lowest price that they would be willing to accept for a meal?
"Long Run Competitive Equilibrium" (Problem 8.2 and 8.5) is when firms are earning zero profits and there is no desire for other firms to enter or exit. At what price will a firm at full capacity (four meals) have to set in order to 'break even?' Think about the total cost of an individual firm at capacity.