Intermediate Microeconomics: A Modern Approach, Seventh Edition

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ECONOMICS 300 FINAL EXAM SPRING 2004 PLEDGE: ____________________________ NAME: ______________________________ 1. (3) In a model of oligopoly: a. There are many firms that are price takers. b. There are many firms that offer heterogeneous product. c. One firm that is a price setter. d. Several firms that interact strategically. 2. (6) Suppose that a firm produces output (Q) using one input (L) using the production function Q = L 2 and faces a labor wage of w L = 2. Write down the total cost function as a function of output Q.
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2 3. (3) Provide a definition for the technical rate of substitution. 4. (3) The following production function has _______ returns to scale and a _______ marginal product for x 2 . Q(x 1 , x 2 ) = x 1 .5 x 2 .6 . a. Increasing, Diminishing. b. Decreasing, Diminishing. c. Increasing, Constant. d. Decreasing, Increasing. 5. (12) A firm in a competitive market with a production function of Q = L .5 , can sell output at the market price of 100, and can hire inputs for a market price of $10. a. Write down the firm’s profit function as a function of the input. b. What is the profit maximizing amount of input to hire?
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3 6. (2) An isocost line indicates: a. Different combinations of goods and services that a consumer can afford. b. Different combinations of inputs that produce the same level of output. c. Different combinations of inputs that cost the same amount. d. Different combinations of outputs that can be sold at the same price. 7.
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exam3 - ECONOMICS 300 FINAL EXAM SPRING 2004 PLEDGE: _...

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