# Register now to access 7 million high quality study materials (What's Course Hero?) Course Hero is the premier provider of high quality online educational resources. With millions of study documents, online tutors, digital flashcards and free courseware, Course Hero is helping students learn more efficiently and effectively. Whether you're interested in exploring new subjects or mastering key topics for your next exam, Course Hero has the tools you need to achieve your goals.

3 Pages

### review2

Course: ECON 201, Fall 2008
School: UVA
Rating:

Word Count: 1010

#### Document Preview

to Answers ECON 201 Practice Problems Midterm II 1. Is it possible for marginal utility to be negative while total utility is positive? If so, explain how. If not, explain why not. Yes, it is possible. If marginal utility is negative, that means that total utility is decreasing. However, as long as the marginal utility of the next unit is less (in absolute value) than the total utility associated with the current...

Register Now

#### Unformatted Document Excerpt

Coursehero >> Virginia >> UVA >> ECON 201

Course Hero has millions of student submitted documents similar to the one
below including study guides, practice problems, reference materials, practice exams, textbook help and tutor support.

Course Hero has millions of student submitted documents similar to the one below including study guides, practice problems, reference materials, practice exams, textbook help and tutor support.
to Answers ECON 201 Practice Problems Midterm II 1. Is it possible for marginal utility to be negative while total utility is positive? If so, explain how. If not, explain why not. Yes, it is possible. If marginal utility is negative, that means that total utility is decreasing. However, as long as the marginal utility of the next unit is less (in absolute value) than the total utility associated with the current level of consumption, then total utility will still be positive once the next unit is consumed. In that situation, the marginal utility of the last unit will be negative, but total utility will still be positive. Take a look at the example in our notes of the marginal utility I get from receiving a 6th guitar and my total utility from receiving 6 guitars to see whats going on. 2. Jim allocates his budget of \$24 per week among three goods. Use the following table of the marginal utilities of good A, good B, and good C to answer the questions below. QA 1 2 3 4 5 MUA 50 40 30 20 15 QB 1 2 3 4 5 MUB 75 60 40 30 20 QC 1 2 3 4 5 MUC 25 20 15 10 7.5 a. If the price of A is \$2, the price of B is \$3, and the price of C is \$1, how much of each good will Jim purchase in order to maximize his utility? Jim will purchase 4 units each of goods A, B and C. The per dollar marginal utility (the ratio of marginal utility to price) is equal to 10 for each good, and Jim spends all of his \$24 (\$8 on A, \$12 on B and \$4 on C). b. If the price of A rises to \$4 while other prices and Jims budget remain unchanged, how much of each will he purchase in equilibrium? Jim will now purchase 2 units of A and 4 units of both B and C. The per dollar marginal utility is 10 for each good, and Jim spends all of his \$24 (\$8 on A, \$12 on B and \$4 on C). c. Using the information from parts (a) and (b), draw Jims demand curve for good A. Be sure to indicate the price and quantity demanded for each point on the curve. P 4 2 D 2 4 Q Page 1 of 3 3. What is the difference between fixed and variable cost? Do both types of costs affect short run marginal cost? If so, explain how each affects marginal cost. If not, explain why each does or does not affect marginal cost. A fixed cost is a cost for a firm in the short run that does not vary with output. Fixed costs are associated with resources which cannot be changed in the short run. Firms must pay fixed costs in the short run regardless of whether or not they produce any output. A variable cost is a cost for a firm that varies with output, and are associated with resources that can vary in the short run. If a firm chooses not to produce in the short run, it incurs no variable costs. Because marginal cost measures the change in total cost as output increases by one unit, it is only affected by the firms variable costs, since by definition fixed costs do not vary with output. 4. Explain why the marginal cost curve intersect must the average total cost curve and the average variable cost curve at their minimum points. Why do the average total cost and average variable cost curves approach one another as output increases? If average cost is falling, marginal cost must lie below average cost. If average cost is rising, marginal cost must lie above average cost. An average can only increase if the marginal amount is greater than the previous average. Average cost (AC) and average variable cost (AVC) differ only by average fixed cost (AFC), which is equal to fixed cost divided by quantity. As quantity increases, AFC must decrease (because the numerator of the fraction is fixed, but the denominator is getting larger), so AC and AVC must be getting closer and closer together. 5. The output level where average total cost is at a minimum is greater than the output level where average variable cost is at a minimum. Why is this the case? As output increases, the average fixed cost (AFC) must fall. Therefore, as output increases, average cost (AC) is pulled down by the AFC falling, since AC = AVC + AFC. Once the AVC curve begins to increase, AC will still fall to the extent that AFC is falling faster than AVC is rising. Eventually, AVC will rise faster than AFC falls, so that the AC curve will start to increase, but this will occur at a quantity greater than that associated with the minimum of the AVC curve. 6. Suppose that a certain manufacturer has a monopoly on the sorority and fraternity ring business (a constant cost industry) because it has persuaded the Greek community to give it exclusive rights to their insignias. a. Using demand and cost curves, draw a diagram depicting the firms profit maximizing price and o...

Find millions of documents on Course Hero - Study Guides, Lecture Notes, Reference Materials, Practice Exams and more. Course Hero has millions of course specific materials providing students with the best way to expand their education.

Below is a small sample set of documents:

UVA - ECON - 201
Draw indifference curves so that if consumption of X exceeds X0 then X is bad, else X is good; similarly if consumption of Y exceeds Y0 then Y is bad, else Y is good. Also suggest what the most desirable bundle is. The most desirable bundle is {X0, Y
UVA - ECON - 201
UVA - ECON - 201
Principles of Economics, Econ 201 Final Exam This exam is closed book, closed notes, and without anyones help. You cannot spend more then 180 minutes on the exam. The exam must be submitted (online) by 9:00 pm on December 18, 2007. Each multiple
UVA - ECON - 201
Use the following to answer questions 1-6: Each citizen in a small town suffers 5 units of irritation for each bushel of leaves burned in the town. The charge for hauling a bushel of leaves to the land fill is a fee equal to 20 units of irritation. T
UVA - ECON - 201
Consumer Choice and ElasticityModified version of slides authored by Gwartney, Macpherson and SkiptonFundamentals of Consumer ChoiceLaw of diminishing marginal utility:As the rate of consumption increases, the marginal utility derived from con
UVA - ECON - 201
Price-Searcher Markets with High Entry Barriers - MonopolyModified version of slides authored by Gwartney, Macpherson and SkiptonWhy are Entry Barriers Sometimes High?Entry BarriersA few examples of factors that may serve as `barriers' to fre
UVA - ECON - 201
Game TheorySource: GoogleGame to playMr. x You A B A (1,1) (0,3) B (3,0) (2,2)GAME THEORY Game theory The tool used to analyze strategic behavior -behavior that recognizes mutual interdependence and takes account of the expected behavior of o
UVA - ECON - 201
The Supply and Demand for Productive ResourcesModified version of slides authored by Gwartney, Macpherson and SkiptonAn Overview of Resource MarketsIntroduction Productive assets are bought and sold in resource markets. These markets help det
UVA - ECON - 201
The Economic ApproachModified version of slides authored by Gwartney, Macpherson and SkiptonHoursEcon201: points gain per hour (MB) 1 2 3 4 5 6 7 8 9 8 8 8 8 8 8 8 8 8History: points lost per hour (MC) 3 1 1.5 2.5 4.5 5 6 8 9.5HoursEcon201
UVA - ECON - 201
Costs and the Supply of GoodsModified version of slides authored by Gwartney, Macpherson and SkiptonOrganization of the Business FirmResidual Claimants In a market economy, firm owners are residual claimants. They keep (Rev Cost). This provi
UVA - ECON - 201
Gaining from International TradeModified version of slides authored by Gwartney, Macpherson and SkiptonThe Trade Sector of the United StatesThe Growth of the U.S. Trade Sector As is shown here, both exports and imports have grown substantiall
UVA - ECON - 201
Supply and Demand:Applications and ExtensionsModified version of slides authored by Gwartney, Macpherson and SkiptonThe Economics of Price ControlsPrice CeilingsA price ceiling establishes a maximum price that sellers are legally permitted
UVA - ECON - 201
Price Takers and the Competitive Process Perfect Competition.Modified version of slides authored by Gwartney, Macpherson and SkiptonPrice Takers and Price SearchersPrice TakersPrice Takers produce identical products and each seller is small
UVA - ECON - 201
Figure 1A B C Hours Econ201: History: points gain per points lost hour (MB) per hour (MC) 1 2 3 4 5 6 7 8 9 8 8 8 8 8 8 8 8 8 3 1 1.5 2.5 4.5 5 6 8 9.5Figure 2A Hours B Econ201: points gain per hour (MB) 1 2 3 4 5 6 7 8 8 8 8 8 8 8 C D History: p
UVA - ECON - 201
Supply, Demand, and the Market ProcessModified version of slides authored by Gwartney, Macpherson and SkiptonConsumer Choice and the Law of DemandLaw of DemandLaw of Demand: the inverse relationship between the price of a good and the quantit
UVA - ECON - 201
Poll results collected from the students of Econ 201 at UVA in Fall 2007 by Kulwant Rai.Poll Number: 1 We should have more homeworks Votes 31 50 5 Total Votes : 86 Poll-1 was given at the beginning of the semester, while Poll-2 was conducted at the
UVA - ECON - 201
Econ 201: Principles of Economics Fall 2007 Instructor: Kulwant Rai Email: kr9c@virginia.edu Office Hours: Friday 5:00 7:00 pm in Wilson - 221 Course website: http:/www.people.virginia.edu/~kr9c/teaching.htm Course Goals: This is an introductory cou
UVA - ECON - 201
Econ 201: Principles of Economics Summer 2008 Instructor: Kulwant Rai Email: kr9c@virginia.edu Office Hours: Wednesday 5:00 7:00 pm in Wilson - 221 Course website: http:/people.virginia.edu/~kr9c/econ201_082.htm Course Goals: This is an introductory
UVA - ECON - 201
Experiment 1 Assign a participation grade to yourself after reading the following1: You can assign any real number between 0 and 5 as your participation grade. Say you assign yourself a participation grade of S and I think you deserve a participati
UVA - ECON - 201
1.Given input prices and the usual strategy of a profit maximizing firm, efficient production occurs at A) the highest isoquant Q for a given isocost C. B) the lowest isoquant Q for a given isocost C. C) the highest isocost C for a given isoquant Q.
UVA - ECON - 201
Midterm Exam Answer SectionMULTIPLE CHOICE 1. ANS: B PTS: 1 TOP: Consumer Choice and the Law of Demand 2. ANS: C PTS: 1 TOP: Changes in Demand versus Changes in Quantity Demanded 3. ANS: B PTS: 1 TOP: Changes in Demand versus Changes in Quantity Dem
UVA - ECON - 201
Homework 3 for Econ 201, due in class on October 10, 2007 (1) Derive price-consumption curve using consumer optimization problem. (a) Does diminishing marginal rate of substation necessarily imply diminishing marginal utility of x and/or diminishing
UVA - ECON - 201
Principles of Economics, Econ 201 Final Exam This exam is closed book, closed notes, and without anyone's help. You cannot spend more then 180 minutes on the exam. The exam must be submitted (online) by 9:00 pm on December 10, 2007. Each multipl
UVA - ECON - 201
Experiment 1 Assign a participation grade to yourself after reading the following: You can assign any real number between 0 and 10 as your participation grade. Say you assign yourself a participation grade of `S' and I think you deserve a participa
UVA - TCC - 315
TCC315PresentationHaiti - A 100 Million Potential Market?- Patrick Guilbaud (UVA SEAS-SIE)AGENDAIntroduction Haiti &amp; Tier-4 Marketing A Quick Historical Overview P-Au-Prince, Haiti Key Issues Examples A Plethora of Opportunities &amp; Options
UVA - TCC - 315
Overview BlueTrak is a system that takes advantage of the new and rapidly growing Bluetooth wireless communication technology in order to facilitate information transfer. It is a system that collects information, relays information, and delivers info
UVA - TCC - 315
Biz Plan Basics:Purposes organize and develop thinking what are the pieces, and how do the connect? strategic planning fundraising management/strategic partner development- A story and a roadmap Avoiding &quot;Ready, Fire, Aim&quot; Business Plans
UVA - TCC - 315
UVA - TCC - 315
UVA - TCC - 315
SCHOOL OFENGINEERINGDivision of TCC&amp; APPLIED SCIENCETCC315/PSYC 418 SPRING 2003 GORMAN/RICHARDSPRELIMINARY DESIGN REVIEW EVALUATION FORM Team Members _ Invention Topic: __ Date: _Criteria1. Mission Statement: Clear, Convincing? 2. Demonst
UVA - TCC - 315
UVA - TCC - 315
UVA - TCC - 315
UVA - TCC - 315
TCC315/Psych 418Creativity and Intelligence Larry G. Richards February 28, 2002Creativity QuestionnaireA few more questionsCan creativity be taught? Yes_ No_CommentsA few more questionsCan creativity be learned? Yes_ No__CommentsWh
UVA - TCC - 315
TCC315/Psych418Designing a consumer product for Tier 4 markets Larry G. RichardsProject 2 Goals to provide an overview of the basic processes fornew product development in a competitive marketplace by simulating them in class. to develop the s
UVA - TCC - 315
TCC315/Psych 418Creativity and Intelligence Larry G. Richards March 11, 2003Creativity QuestionnaireA few more questionsCan creativity be taught? Yes_ No_CommentsA few more questionsCan creativity be learned? Yes_ No__CommentsWhat
UVA - TCC - 315
TCC315/Psych418Designing a consumer product Project II Larry G. RichardsProject 2 Goals to provide an overview of the basicprocesses for new product development in a competitive marketplace by simulating them in class. to develop the skills fo
UVA - TCC - 315
Class Contacts Professor Matthew M. Mehalik Office Hours: W 2:00 5:00 pm TR 3:30 5:00 pm Office: Thornton A233 Email: mehalik@virginia.edu Phone: 982-2004Class Contacts Prof. Michael E. Gorman Office: Thornton A237 Email: meg3c@virginia.edu Pho
UVA - TCC - 315
B. Garrey &amp; M. Gorman (4/18/02) HYPOTHETICAL CASE: AN ENGINEER MOVING FROM ONE COMPANY TO ANOTHER1Innovative Solutions is the market leader in the field of medical adhesives. Followfast, Inc. has only a small percentage of the medical adhesive ma
UVA - TCC - 315
Biz Plan Basics: Purposes organize and develop thinking what are the pieces, and how do the connect? strategic planning fundraising management/strategic partner development A story and a roadmap Avoiding &quot;Ready, Fire, Aim&quot; Business Pl
UVA - TCC - 315
B. GARREY TIPS ON HOW TO CHANGE JOBS WITHOUT GETTING SUED 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Be open and honest. Do not take any company property. Return all company property, including materials at issue. Do not recruit from your former employer. Don't
UVA - TCC - 315
B. GARREYEXCERPT FROM PROPRIETARY RIGHTS AND CONFIDENTIALITY AGREEMENT FOR XYZ CORP. DEFINITIONS: &quot;Confidential Information&quot; means all business information, technological information, intellectual property, trade secrets and other information belon
UVA - TCC - 315
B. GARREY &amp; M . GORMAN HYPOTHETICAL CASE: GROUP OF ENGINEERS MOVING FROM ONE COMPANY TO ANOTHER1You are an engineer for VATECH Solutions. You have worked there for ten years. You have just been offered a job by Wahoo Enterprises. Wahoo Enterprise
UVA - TCC - 315
B. GarreySUGGESTED INSERT TO ANY EMPLOYEE AGREEMENT CONTAINING POST EMPLOYMENT RESTRICTIONSIf I am unable to obtain employment consistent with my abilities and education, within one month after termination of my employment with ABC, solely becaus
UVA - TCC - 315
Please contact me if you need any more info or contacts. atulk@virginia.edu -Atul Khosla India's Biggest Problems 1. Lack of clean water and sanitation 2. Poor infrastructure for public health services and high cost of ordinary medicine. No education
UVA - STS - 401
UNDERGRADUATE THESIS PROJECT PRE-PROPOSAL School of Engineering and Applied Science University of VirginiaA Novel Boolean Satisfiability (SAT) Solver: Design and Implementation of an Efficient SAT-Solver Via Distributed ComputingSubmitted by Erwi
UVA - TCC - 402
CONTENTS OF THE FINAL BINDERInsert this sheet unbound in the very front of the final binder. The items should be ordered as they are listed below. Individual documents should have page numbers, but there is no need to merge the documents so that the
Idaho - ECE - 562
Chapter Four (Datta) 4.1 Basis functions as a computational tool We have already seen that I can write any wavefunction in terms of basis functions ( r ) = mum ( r )m =1 N(4.1.1)Two sets of basis functions that we have used extensively are: a)
UVA - TCC - 315