ef2452_B07_PS5

# ef2452_B07_PS5 - the village is 800 and the local...

This preview shows pages 1–2. Sign up to view the full content.

(EF 2452) Problem Set#5 Due: Week 6 Tutorial Class Please write your name, student ID and tutorial number on top of your answer sheet. Q1. The demand function for a monopolist is given by: Q = 20 - P and its total costs (TC) are given by: TC = 48 + 4 Q (a) Find the largest break-even output level the monopolist can produce (i.e. largest output level consistent with zero pro±ts). (b) Find the pro±t maximizing output for the monopolist. Q2. The loss of land, caused by rising sea-level due to global warming, is anticipated to lead to a decline in the population of a rural village in one of the outlying islands of Hong Kong by 5% per annum over the foreseeable future. The current population of

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: the village is 800 and the local authorities have threatened to close the local post-o²ce if the population falls below 700. How long is the post-o²ce likely to remain open in this village? Q3. Consider the following production functions, where Q is output and L & K denote the respective amounts of labor and capital used in the production process. For each of them, determine whether they are homogenous and if yes, ±nd whether they have increasing, decreasing or constant returns to scale. (a) Q = √ 2 + √ LK (b) Q = √ 2 LK (c) Q = 10 e 2 L K (d) Q = 10 ln( √ LK ) (e) Q = 50 L 2 3 K 1 2...
View Full Document

## This note was uploaded on 02/22/2009 for the course ECONOMICS 4313 taught by Professor Tsui during the Spring '09 term at HKU.

### Page1 / 2

ef2452_B07_PS5 - the village is 800 and the local...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online