midterm - Department of Economics University of California...

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Department of Economics Fall 2004 University of California Woroch/Lopez/Sydnor Economics 121: MIDTERM EXAM GENERAL INSTRUCTIONS : Write your name and your TA’s name on the front cover of each of TWO BLUE BOOKS. The exam has 3 parts. Put Parts I and II.1 in one blue book, and Parts II.2 and III in the second. Point assignments are given in the instructions for each part. The exam is worth 100 points. You may check your calculation on scratch paper but be certain to put all of your answers in the bluebooks . I. TRUE or FALSE or UNCERTAIN and EXPLAIN : Choose 4 of the following 5 statements, and decide whether each is true or false or uncertain, and then explain the reasoning behind your answer in a few sentences; if appropriate, provide a diagram. Each question is worth 8 points for a total of 32 points. 1. If the costs of producing two goods, 1 and 2, individually and jointly, are given by the cost functions: C(q 1 , 0) = 125 + q 1 2 C(0, q 2 ) = 200 + q 2 2 C(q 1 , q 2 ) = 250 + q 1 2 + q 2 2 + q 1 q 2 then there are economies of scope between the two products for all levels of production. 2. The Lerner Index increases as the number of symmetric Cournot oligopolists increases. 3. In the normal form game at the rights, if 2 < X < 3 and 3 < Y < 4, then (B1, B2) is a Nash equilibrium and it is also Pareto Optimal. 4.
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midterm - Department of Economics University of California...

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