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ARME 608
Final Exam
Fall 1997
1.
In ocean fishing (in a region of the ocean), the number of
fish caught is an increasing but first convex
and then concave function of the number of fishing boats.
How many fishing boats will be used if each
boat is independently owned?
How many boats would be used if the fisherman and fisherwomen form a
cooperative?
How many boats will be used if the fishing rights are given or sold to one individual?
(Assume constant output price and input prices).
2.
If marginal cost decreases as the price of some input factor increases, then that factor must be inferior.
(True or False, Explain).
3.
Can the following function be used as a profit function?
∏
= ap  b
1
r
1
 b
2
r
2

br
2p
31
2

br
2p
42
2

brr
p
512
4.
Is the CobbDouglas production functionally separable such that some inputs can be aggregated into a
composite input?
5.
Show how linear programming models:
a)
productproduct decisions
b)
factorfactor decisions
c)
factorproduct decisions
6.
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