Gina has an overwhelming fear of heights, so she seeks a therapist to conduct systematic desensitization with her. Which of the following is most likely to occur first during Gina’s therapy?

When Paul tells his therapist that his success on an exam was due to “luck”, his therapist attempts to help Paul see that his success was actually due to hard work and intelligence.  This best illustrates a _________ approach.

Option 3:  The diagram below has an incumbent firm’s LRAC curve as well as the market demand. This incumbent firm currently produces an output of 300 and charges a price of 20. (i) What is the minimum output level a potential entrant would need to produce at if it feared that the incumbent would price compete? (ii) Explain how economies of scale could be an important deterrent to entry even though there are not economies of scale over all ranges of output.

Option 2: Consider a restaurant owner who has signed a one year lease for a building in Galveston. The lease requires a monthly rent of $2000. The owner also acquired a liquor license for one year for $7000. For simplicity assume these are the only fixed costs and these costs are sunk. The restaurants revenues are around $6000 for 6 months of the year (high season) and $1500 per month for the rest of the year (low season). Monthly variable costs are $3000 in the high season $2000 in the low season   (i) Would the firm find it optimal to remain open in the low season? Why or why not?   (ii) Would the firm want to exit this industry in the long run (after one year)? Explain.

PART 2 OPTION 2:

Part 2: Answer 2 of the following 3 questions. If you answer more than 2, only the first two will be graded.    

What innovation was made possible by the development of steel for a skeletal structure and the elevator?

Exposing treated silver plates to light and then fixing the images onto the plate with a mineral salt solution creates __________.

A sculpture created from found, discarded, or familiar objects is called __________. Nick Cave’s Sculpture is an example.

Greek artists provided lifelike qualities to human figures by using __________, positioning the figures weight on one foot causing the hip and shoulder to counter balance.