Practice_Test2

Practice_Test2 - N ame: srudento: N LANGARA C OLLEGE...

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Name: srudent No: lnswtQ's LANGARA COLLEGE Economics 2296: Managerial Economics Test 2 Time allowed: 80 minutes March 24.2009 Total marks: 40 marks Answer the following eight questions in the space provided. Turn off all cell phones, pagers or anything else that might beep or that can be used to communicate with others. No books, notes, scrap paper or electronic devices allowed, with the exception of a simple, nonprogrammable, calculator. Explain your answers and show your work. Question 1 (8 marks) Suppose a production function is given by Q - 4KrtzL''', ft" price of labour is $20 and the price of capital is $80. Derive the long-run total cost function. 5,++,y tukrs t */, f,'ves k t L r,rr t / T I of /<, r/r{ : 5o CoJ ic i ,uL +v^k ifuL lgbttrL) a : tl k'/.Lt/- , (%)^t/z = zL *ln rn or L t Q/e- lrft t 10 a -' 7U = r =-
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,"*{ Question 2 (8 marks) The widget industry is a perfectly competitive, constant-cost industry. Assume an initial long-run equilibrium position. Suppose there is an increase in household income (assume a normal good). Outline the impact of this on both the firm's and the industry's price and
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Practice_Test2 - N ame: srudento: N LANGARA C OLLEGE...

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