PS9 - UCLA Economics 11 Fall 2009 Professor Mazzocco...

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UCLA Economics 11 – Fall 2009 Professor Mazzocco Problem Set 9 Because of the final this problem set will not be graded and you do not have to turn it in. However, solving the following exercises is an excellent practice for the final. 1) Suppose there are 200 identical firms in a perfect competitive industry. Moreover, assume that each firm has the following short run cost function: C(q) = 0.5q 2 + 5q + 20. a) Compute the short-run supply curve for a single firm, expressing q as a function the price P. b) Calculate the short-run industry supply curve. c) Now assume that the market demand is given by Q D = 1000 50P. Compute the short-run equilibrium price and its corresponding quantity. 2) Assume that there are two types of consumers. In particular, consumers of type 1 has utility function u(x, y) = x 0.5 y 0.5 , whereas consumer of type 2 has u(x, y) = x 0.3 y 0.7 . Both of them have income given by I>0, and the prices denoted are by P X and P Y , as usual. a) Find the Marshallian demands of x for both types of consumers.
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This note was uploaded on 04/19/2010 for the course ECON Econ 11 taught by Professor Mcdevitt during the Fall '07 term at UCLA.

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PS9 - UCLA Economics 11 Fall 2009 Professor Mazzocco...

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