Which of the following situations would be considered cyclical unemployment? choose one or more: a. a college instructor’s contract is not renewed because more people are taking online classes and the college does not need as many classroom instructors. b. a worker on the assembly line at ford is laid off due to a drop in car sales brought on by a weak economy. c. a friend wins the lottery and quits working. he says he will never work again. d. a friend is taking a trip around the world while she waits for another job offer. she has been offered six jobs but has not accepted any of them. e. a recent college graduate cannot find a job anywhere, despite excellent qualifications. the news media report that there are not enough jobs to go around in the economy. f. a typewriter repair shop closes, citing lack of business. the owner is quoted as saying, "we haven’t had a customer in weeks. it has something to do with people using computers."

1. consider a two-firm industry. firm 1 (the incumbent) chooses a level of output qı. firm 2 (the potential entrant) observes qı and then chooses its level of output q2. the demand for the product is p 100 q, where q is the total output sold by the two firms which equals qi +q2. assume that the marginal cost of each firm is zero. a) find the subgame perfect equilibrium levels of qi and q2 keeping in mind that firm 1 chooses qi first and firm 2 observes qi and chooses its q2. find the profits of the two firms-n1 and t2- in the subgame perfect equilibrium. how do these numbers differ from the cournot equilibrium? b) for what level of qi would firm 2 be deterred from entering? would a rational firm 1 have an incentive to choose this level of qi? which entry condition does this market have: blockaded, deterred, or accommodated? now suppose that firm 2 has to incur a fixed cost of entry, f> 0. c) for what values of f will entry be blockaded? d) find out the entry deterring level of q, denoted by q1', a expression for firm l's profit, when entry is deterred, as a function of f. for what values of f would firm 1 use an entry deterring strategy?