100B extra practice qs

100B extra practice qs - Q= 2 p The government imposes a...

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1. Suppose output is produced according to the production function Q6 =min( K , 2 L ), what is the expansion path of this production function? 2. Suppose a firm’s average cost curve is described by the equation AC = 2 q 2 -16 q + 90. At what output level does the marginal cost curve cross the average cost curve? 3. If input prices are w= 4, and r = 1, and q =4 K 0.5 L 0.5 , what is the least cost input combination required to produce 40 units of output? 4. Suppose a perfectly competitive firm has the short-run cost function C= 125 + q 2 . Determine the firm’s output level and profit at prices of $30 and $20. At what price does the firm reach the shut-down point? 5. Demand in Market 1 for X is Q d =80 - p . Demand in Market 2 is Q d =120- 2 p . At a price of $20, which has a larger consumer surplus? 6. Suppose the demand curve for a good is Q =9- p and the supply curve is
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Unformatted text preview: Q= 2 p . The government imposes a specific tax of t=1 per unit. What would be the equilibrium? What effect does the tax have on consumer surplus, producer surplus and deadweight loss? Sketch a graph. 7. Two individuals, Fred and Ray, in an economy with no production, each have the utility function U= 10 XY . Prices of both X and Y are set at $1. Initial endowments for Fred are 10 units of X and 6 units of Y . Ray has 8 units of X and 12 units of Y . Show that this endowment is not on the contract curve. 8. Suppose Adam and James both regard peanut butter and jelly as perfect complements at a 1:1 ratio. Show using an Edgeworth box diagram that if Adam receives 10 peanut butter and no jelly, and James receives 10 jelly and no peanut butter, after trading, where will they end up?...
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