Assignment-2 - value. c) What general principle does this...

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Assignment-2 1. Given the consumption function C = a + bY (with a > 0; 0 < b < 1 ): a) Find its marginal function and its average function. b) Find the income elasticity of consumption ε CY , and determine its sign, assuming Y > 0 . 2. The supply function of a certain commodity is Q = a + bP 2 + R 1/2 (a < 0, b > 0) [R = rainfall] Find the price elasticity of supply QP , and the rainfall elasticity of supply QR . 3. For the following function use the implicit function rule to find ə y/ ə x and ə y/ ə z: F (x, y, z) = x 2 y 3 + z 2 + xyz = 0 4 . Let T = ) ( x φ be a total function (e.g., total product or total cost) a) Write out the expression for the marginal function M and the average function A. b) Show that, when A reaches a relative extremum, M and A must have the same
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Unformatted text preview: value. c) What general principle does this suggest for the drawing of a marginal curve and an average curve in the same diagram? d) What can you conclude about the elasticity of the total function T at the point where A reaches an extreme value? 5 . A firm has the following cost and demand functions: C=1/3Q 3-7Q 2 +111Q+50 Q=100-P a. Write out the total-revenue function R in terms of Q. b. Formulate the total-profit function ∏ in terms of Q. c. Find the profit maximizing level of output Q * . d. What is the maximum profit? 6 . Find the derivative of the following function by first taking the natural log of both sides: ) 4 )( 2 ( 3 + + = X X X Y...
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This note was uploaded on 04/24/2011 for the course ECON 201 taught by Professor Takrimasyeda during the Fall '08 term at BRAC University.

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