strategy for all firms involved. Use the table to answer the following questions. Firm 2 CheatsFirm 2 Doesn't CheatFirm 1 earns: Firm 1 earns: $4,000 $8,000 Firm 2 earns: Firm 2 earns: Firm 1 Cheats$4,000 $2,000 Firm 1 earns: Firm 1 earns: $2,000 $6,000 Firm 2 earns: Firm 2 earns: Firm 1Doesn't Cheat$8,000 $6,000 10. If this table represents the payoffs for two firms operating as a cartel, how many Nash equilibria are there? Name it/them. (2 pts) 11. Given what you know about cartels and Nash equilibria, which outcome is most likely to occur in this market? (1 pt)
12. Does your answer to question 11 change if firms can communicate and monitor each other’s behavior more easily? Why? (2 pts) Chapter 17Questions 13-14 (Figure: Market for Plumbers) 13. If the market in this figure is in equilibrium, what hourly wage are plumbers paid? (1 pt) 14. What is the marginal product of labor for plumbers at equilibrium? (1 pt)
Use the following to answer questions 15-18. Table: Abracadabra Processor Limited (Annual Production) Workers Total Output Total Revenue Total Labor Cost 390041,25051,55061,80072,00082,15092,25015. Each computer chip produced sells for $350. First, fill in the Total Revenue column using P = $350. Then, if workers are each paid $45,000 a year, fill in the Total Labor Cost column. (2 pts) 16. Using the information you calculated in question 15, how many workers will the company hire and how much output will the company produce at $350 per chip and $45,000 per worker? (2 pts) 17. What is the firm's Marginal Product of Labor at the profit maximizing level of production?