Module 5-7 Journal Entries (18%)

Module 5 Journal Entries (6%)

Journal Entry

Complete a Journal Entry: Mario recently opened a pizza restaurant and has one
pizza oven. The data for his restaurant is in the table below. Answer the following:

A. Fill in the last column.

B. Explain how the law of diminishing returns applies to Mario’s restaurant.
C. Explain the result of hiring the 6th worker—how can the change in the
marginal product be possible?

Marios’s Pizza Restaurant

Number of workers Total number of pizzas produced/day (output)
0 0

1 15

2 35

3 50

4 60

5 65

6 60
Rubric

Description
Fills in the last column.
Explains how law of diminishing returns applies to Mario's restaurant.
Explains the result of hiring the 6th worker and how can the change in the marginal product be possible.
Total
Journal Entry
Complete a Journal Entry: With reference to the Globe and Mail article “Reserve-
based businesses go global as Indigenous entrepreneurs tap into e-commerce" and
Section 8.7 in the textbook, explain the role of technological change and
globalization on Indigenous businesses in Canada (200–300 words).

Rubric

Description
Explains the role of technological change on Indigenous businesses in Canada.
Explains the role of globalization on Indigenous businesses in Canada.
Total
Note

Please keep your journal entries in a document called “ECON 1901 Journal_First
Name_Last Name_ DD_MM_YYYY” and submit the document at the end of Module
7. Throughout the course, keep adding your journal entries to the same document
as you complete them, making sure you name each entry and include the journal
topic/question as well as your answer. 

Module 6 Journal Entries (6%)

Journal Entry

Complete a Journal Entry: With reference to "The Parable of the Seaside Inn",
answer the following questions:

A. Why do some resort hotels stay open during the off-season when the
bargain rates they charge do not cover their “full costs”?
B. Why do some resort hotels fall into disrepair even when they can attract
enough customers to stay in business?
C. What will be the long run outcome for the hotel described in part b, if
too few customers are attracted during the off-season for several years?
Rubric

Description
Explains why some resort hotels stay open during the off-season when the bargain rates they charge do not cov
Explains why some resort hotels fall into disrepair even when they can attract enough customers to stay in busi
Explains what the long run outcome would be for the hotel described in part b, if too few customers are attracte
 season for several years.
Total
Journal Entry

Complete a Journal Entry: In the pharmaceutical industry, when a firm discovers a

new drug, patent law gives the firm a monopoly to produce the drug until the
patent runs out (20 years in many developed countries such as Canada). When the
patent expires, other firms enter the market to produce and sell a generic drug
which is chemically identical to the former monopolist’s brand-name drug. For
instance, acetaminophen is the generic name for the name brand pain reliever drug
Tylenol.

A. With a graph, illustrate the profit maximizing quantity and price for
Tylenol prior to the expiration of the patent.
B. With a new graph, illustrate how the quantity produced and price change
after the patent expires and generic drugs are produced.
C. Even after patents expire and generic drugs are produced, the price of
the name brand drug often remains higher. Why do you think this
occurs?
Rubric

Description
Draws a graph illustrating the profit maximizing quantity and price for Tylenol prior to the expiration of the pa
Draws a graph illustrating how the quantity produced and price change after the patent expires and generic drug
Offers thoughts on why it could be that even after patents expire and generic drugs are produced, the price of th
often remains higher.
Total
Journal Entry

Complete a Journal Entry: Consider the following payoff matrix for an airline
duopoly:

 
Price high

Luxury Air Price high $6m, $6m

 Price low $8m, $3m
A. Name the two strategies
B. Is there a dominant strategy? Explain.
C. Is there a Nash equilibrium? Explain.
D. If the two airlines collude, what will be their strategy?
E. Is there an incentive to defect on a collusive agreement? Explain.
Rubric

Description
Names the two strategies.
Identifies and explains the dominant strategy.
Explains whether there is a Nash equilibrium.
Provides thoughts on what the strategy would be should the two airlines collude.
Explains whether there is an incentive to defect on a collusive agreement.
Total
Module 7 Journal Entries (6%)

Journal Entry

Complete a Journal Entry: Which of the following salaries is likely to have a greater
proportion of rent? The annual income of Taylor Swift or the salary of a software
engineer working for a gaming company. Explain.

Rubric

Description
Identifies which of the two salaries is likely to have a greater proportion of rent.
Explains why.
Total
Journal Entry

Complete a Journal Entry: Suppose the Premier of BC proposes a legislation with

the objective of reducing healthcare costs: a junk food tax of 20% is applied to all
potato chip sales.
 A. How would this tax affect the demand and equilibrium price of potato
chips? (use a graph and explain in words)
B. How would this tax affect the marginal product and the value of the
marginal product of potato chip factory workers? (answer in words)
C. How would the tax affect the demand and equilibrium wage for potato
factory workers? (use a graph and explain in words)
Rubric

Description
Explains and draws a graph illustrating how the new junk food tax affects the demand and equilibrium price of
Provides thoughts on how the tax could affect the marginal product and the value of the marginal product of po
workers.
Explains and draws a graph illustrating how the tax would affect the demand and equilibrium wage for potato f
Total