Math for Econ I- Practice Problems New York UniversitySolutions

Math for Econ I- Practice Problems
New York University
1. Supply and demand
1. In a California town, the monthly charge for waste collection is $8 for 32 gallons of waste and $12 . 32 for 68 gallons
of waste.
(a) Find a linear formula for the cost, C , of waste collection as a function of the number of gallons of waste, w .
(b) What is the slope of the line found in part (a)? Give units and interpret your answer in terms of the cost
of waste collection.
(c) What is the vertical intercept of the line found in part (a)? Give units and interpret your answer in terms
of the cost of waste collection.
Solution:
2. Production costs for manufacturing running shoes consist of a fixed overhead of $650 , 000 (“fixed cost”) plus a
cost of $20 per pair of shoes (“variable cost”). Each pair of shoes sells for $70.
(a) Find the total cost, C ( q ), the total revenue, R ( q ), and the total profit, ⇡ ( q ), as a function of the number of
pairs of shoes produced, q .
(b) How many pairs of shoes must be produced and sold for the company to make a profit?
Solution: