Prelim1_301_f06

Intermediate Microeconomics: A Modern Approach, Seventh Edition

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Economics 301 – Fall 2006 – PRELIM 1 - J. Wissink – Thursday October 5, 2006 Directions: Answer all questions. Write legibly, concisely, and coherently. Be sure to label all axes, functions, and variables you use. READ QUESTIONS CAREFULLY. Draw pictures whenever possible. Show all your work! Total time for the test is 90 minutes. Total points on test = 100 ANSWER ALL THE QUESTIONS. See point scores by each question. 1. (16 pts) Angelina and Brad both produce movies and TV interviews with their time. The time input is measured in person-hours, movies are measured in number of movies and TV interviews are measured in number of shows. Fractional units are just allowed for all values. The table below shows time input requirements to produce a movie and a TV interview for Angelina and for Brad. (It is assumed that the time requirements per movie or TV interview remain the same regardless of the total time spent on the production of each). Both Angelina and Brad have 100 hours of time available, which can be allocated between the two activities. Suppose that both of them have to get as many of both activities done as possible. Angelina Brad 1 movie 20 hrs 25 hrs 1 TV interview 15 hrs 10 hrs a. What is Angelina's marginal opportunity cost of producing an extra movie? What is Brad's? What is Angelina's marginal opportunity cost of giving an extra TV interview? And for Brad? b. Suppose that both Angelina and Brad are self sufficient i.e., they each rely only on themselves for giving TV interviews and producing movies. Also assume that each of them devotes exactly half of their total time available to the production of movies and the other half to TV interviews. What is the combination of movies and TV interviews produced by each person? c.
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This homework help was uploaded on 02/01/2008 for the course ECON 3010 taught by Professor Wissink during the Fall '07 term at Cornell.

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Prelim1_301_f06 - Economics 301 Fall 2006 PRELIM 1 J...

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