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Unformatted text preview: Eco11, Fall 2008 Simon Board Economics 11: Homework 4 November 27, 2008 Due date: Thursday 4th December. Instructions: You are required to write up your solution separately and independently, al- though you are encouraged to discuss and work in groups. Please write your name, student ID number, and the name of your TA on the front page of the assignment that you hand in. Also, please put boxes around your final answer to each part. 1. Deriving Supply Functions (a) A firm has cost function c ( q ) = q 2 for q < 2 = q 2 + q- 2 for q 2 Derive the firms supply curve, q * ( p ). (b) A firm has cost function c ( q ) = q 2 for q < 2 = q 2- q + 2 for q 2 Derive the firms supply curve, q * ( p ). 2. Equilibrium There is an economy with 50 agents. Of these agents, ten have income m = 10, ten have m = 20, ten have m = 30, ten have m = 40 and ten have m = 50. Each agent has utility function u ( x 1 ,x 2 ) = x 1 / 2 1 + x 1 / 2 2 over goods x 1 and x 2 . The price of good 2 equals 1. The price of good 1 is to be determined....
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This note was uploaded on 04/25/2009 for the course ECON 11 taught by Professor Cunningham during the Fall '08 term at UCLA.
- Fall '08