final_fall06_dec19a_fixed

final_fall06_dec19a_fixed - Final Economics 304K:...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Final Economics 304K: Principles of Microeconomics Prof. Meg Ledyard Form A 3 hours Name: _____________________ UTEID: _____________________ You have 3 hours for the exam. There are a total of 100 points. You may NOT use calculators or other aids. You may leave any fractions un-simplified. Please show all of your work on the following pages. If you need more space, please use the back. Properly label all graphs. You should have 10 pages including this one. Please count them to be sure. Make sure that you include your test form on your multiple choice answer sheet in the box labeled TEST FORM (1 Point) Have a good vacation!!!!
Background image of page 1

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

View Full DocumentRight Arrow Icon
2 Question 1 (10 points) Suppose that the market for baseball tickets is a natural monopoly. Suppose that the government regulates the market with average total cost pricing. Graphically illustrate this market for baseball tickets. In the diagram below, show: Label the price that the firm will charge under this regulation as P 1 Label the quantity the firm will produce under this regulation as Q 1 . Label or state the firm’s profits. Label or state the Deadweight Loss.
Background image of page 2
3 Question 2 (10 Points) Suppose that Betty consumes Ponchos and ham. Suppose that Ponchos are Giffen goods. The price of Ponchos is $10 and the price of ham is $15. In the diagram below, show Betty’s consumption of Ponchos and Ham when her income is $300 and when her income is $150. Put Ham on the x-axis. Please label the following (in addition to any other labels necessary to complete the problem): Quantity of Ponchos consumed when her income is $300 as Q P 300 Quantity of Ponchos consumed when her income is $150 as Q P 150 Quantity of Ham consumed when her income is $300 as Q H 300 Quantity of Ham consumed when her income is $150 as Q H 150
Background image of page 3

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

View Full DocumentRight Arrow Icon
4 Question 3 (10 points) Consider the perfectly competitive market for pasta in a small country. The closed economy price is 3. The world price for pasta is 2. Graphically illustrate the market for pasta when there is free trade. For the market with free trade: Label quantity of pasta consumed domestically as QD. Label free trade price as PF. Label quantity of exports/imports. (You determine whether the good is exported or imported.) Label the quantity of pasta produced domestically as QS. Label the closed economy price and the world price.
Background image of page 4
5 Multiple Choice (Each question is worth 3 points) (Total 23 questions, 69 points) For each question below, choose the best among the answer. Fill in the corresponding bubble on your answer sheet. Information for Q 1-2 Suppose that the government of a community is trying to decide whether to build a park, which will be non-rival and non-excludable. There are a total of 100 members of the town. There are 10 members of town who like the park at $50 each, 5 members who like the park at $10 each and 85 members who like the park at $0. The park costs $500 to build (this is equal to $5 per member). Q1
Background image of page 5

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

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/08/2008 for the course ECON 304K taught by Professor Ledyard during the Spring '08 term at University of Texas at Austin.

Page1 / 12

final_fall06_dec19a_fixed - Final Economics 304K:...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online