{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

100A Final Exam WI07 - Microeconomics ECO 100A Winter 2007...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Microeconomics, ECO 100A, Winter 2007, Dr. Famulari Final Exam Version A: 500 points total *** You must show your work to get credit for your answers *** . 1. (40 points total) Cars are produced using tires (T) and chassis (C). For each car made, 4 tires and one chassis must be used. A. (10 points) What is the production function for cars? B. (10 points) Draw the isoquant for 10 cars (be sure to label the axis) C. (10 points) Assume the car producers signs a contract to have 10 chassis brought to her store every day for the next month. In the short run, the firm’s chassis quantity is fixed, but she can adjust the amount of tires she uses each day. How many tires will the firm have to use to make various levels of output each day, C SR (q, K )? D. (10 points) What is are the short run total costs of making cars, STC(q, w, r, K ), when the price of chassis are $5000 and tires are $50 each? What are the firm’s variable costs of making cars? What are the fixed costs?
Image of page 1

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

View Full Document Right Arrow Icon
2. (40 points total) Output (Q) is made using two inputs, labor (L) and capital (K). The firm’s production function is q=L α K β 2A. (10 points) Define the marginal product of labor both verbally and mathematically. 2B. (15 points) Under what conditions will the hypothesis of diminishing marginal product of labor hold for this production function? Prove your answer. 2C. (15 points) Provide an intuitive explanation to your friend (who is not an economics major) for why economists hypothesize the marginal product of any input is diminishing.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern