1. a. Graph Marginal Revenue, Average Revenue, Marginal Cost, and Average Total Cost as we would expect to see for a firm in a Purely Competitive market. 
b. Explain why we expect the trend of economic profit to be zero. 
c. How does the assumption that firms maximize profits help bring about economic efficiency?

2. Discuss the question of economic efficiency with regard to monopoly. Can monopolies be efficient? Can
they be preferable to competition? Why does government sometimes restrict monopoly, and sometimes
encourage it?

3. How do we measure elasticity? Why do we measure elasticity? Give specific examples.

Price	Quantity
1000	8
2000	7
3000	6
4000	5
5000	4

	Q = 11- Price

3. Discuss the incentive for oligopolistic firms to coordinate their activities. Include an example of game theory—and a payoff matrix—as part of your explanation.

4. How might one model the effect of corruption on a particular economy?

5. Discuss the article below. Explain—as an economist—the reasons for the "building boom." What are the implications for labor costs in Moscow. Should any secondary effects be expected, for example, in the government sector? In other industries? In other cities or countries?

Moscow is covered with scaffolding amid a frenzied building boom as workers rush to erect office buildings, apartment blocks and shops in every part of the Russian capital. 

Moscow Deputy Mayor Vladimir Ressin said that Moscow was covered with thousands of cranes and that tens of thousands of mechanical diggers and 740,000 building workers were labouring on the building sites. 

Last year, 3.5 million square metres of new housing were built, and the same amount is planned for this year, Ressin said. He added that a small number of existing occupants had been rehoused, but that most of the new buildings -- more than two million square metres a year -- were put on the market. 

In the heart of the city and the outskirts alike, all the new buildings sell like hot cakes, say Ressin, the builders, who often are also the investors and the real estate agents. 

The average price is 650 dollars per square metre but the figure can reach 4,500 dollars in the city centre for apartments that are sold off without any problem despite the lack of internal fixtures and fittings. 

At the same time, office buildings are in high demand, especially the luxury end of the market. 

"There is a high occupancy rate, and we are heading for a shortage next year, said Arnaud Benoit, head of Colliers HIB real estate. 

In the city centre, 1.5 million square metres of offices were put on sale this year - "not enough," said Benoit, in a capital where oil companies Slavneft and Sibneft are taking over thousands of square metres of prime office space. 

Moscow mayor Yuri Luzhkov is also doing his bit to renovate the historic centre of the capital, with construction of an underground shopping centre under the Manezh Aquare, rebuilding of the Saviour Cathedral and renovation of the Bolshoi theatre. 

A step away from Red Square, a new business and shopping centre, the Gostini Dvor -- a building dating from the epoch of Catherine the Great -- has been completely renovated at a cost of 300 million dollars. 

Critics of the mayor, such as Yuri Bocharov from the Academy of Architecture, say he is trying to confuse investors. 

"He is copying the gigantic projects of the totalitarian period, but is doing nothing to solve the strategic problems of the capital's development," Bocharov said in a recent issue of the weekly Vlast.