Homework 2: Final Version
Due Tuesday, Feb 8.

In this experiment, sellers' costs were fixed costs, that is, they were 
independent of the number of fish sold.  

1. Would a seller prefer to sell at *2 than to not sell at all?  What is 
the loss (gain) of selling at *2 over not selling at all.

2. In experiment 2.1, how many fish should be supplied at a price of *5?  *15?  *25?

3. On separate graphs, graph the theoretical supply for experiments 2.2, 2.3 and 2.4.

4. Add the demand to these graphs.  (Use the theory, not what actually occurred.)

5. Fill in the following table:

Experiment:		2.2		2.3		2.4

Predicted Price:	____		____		____

Actual Price:		____		____		____

Predicted Q: 		____		____		____

Actual Q: 	 	____		____		____

Predicted
Seller Profits: 	____		____		____

Actual
Seller Profits: 	____		____		____

6.Were sellers better off in producing more?  Why or why not?  (Compare 2.2 to 2.4)

7. The Sunkist orange cooperative often orders the destruction of a portion 
of the orange crop.  (The destroyed oranges are sold as cattle feed.)  
Suppose you are a fisher and the island fish cooperative orders every fisher
in experiment 2.4 to destroy half their catch.  Would such an action
increase seller profits?

8. Now suppose you can sell the fish that was ordered destroyed in the 
previous question, by giving it to your brother-in-law to sell for you.  
Would it be profitable to do so?  Why?