ARME608 MID TERM EXAM 1996 - ARME 608 First Exam Fall 1996...

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ARME 608 First Exam Fall 1996 1. Given the production function y = 2x ± and the price of x as r, derive and graph the total cost, marginal cost, and average cost functions. What happens to these three functions if the price of x increases? 2. Is the production function y xx xx =+ 12 1 2 2 2 , homogeneous? Is it homothetic? 3. Is the following sentence true or false (show): If a firm is maximizing profit, then the rate of change of output with respect to a input price change is equal to the rate of
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