This preview shows pages 1–3. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Sample Paper Attempt All Questions: Q # 1: A company estimates that the demand for its product fluctuates with the price it char4ges. The demand function is: = ,- q 280 000 400p where q equals the number of units demanded and p equals the price in dollars. The cost function is estimated as: = , + + . C 350 000 300q 0 0015q2 a) Determine how many units should be produced in order to maximize annual profit. b) What price should be charged? c) What is the annual profit expected to equal? Q # 2: An individual’s utility function is given by: = + . + .- .- . U 10x1 4 5x2 0 05x1x2 0 02x12 0 01x22 a) Determine the values of & MU1 MU2 when = . & = . x1 1 3 x2 5 Hence, estimate the change in utility if the x1 increases by one unit and x2 increases by 15 units. b) Does the law of Diminishing Marginal Utility hold for this function? Q # 3: Verify Euler’s theorem for the Cobb–Douglas production function: = Q AKαLβ NOTE: this is a homogeneous function of degree + . α β 1 | P a g e Q # 4: a)...
View Full Document
This note was uploaded on 05/21/2011 for the course MARKETING 104 taught by Professor Fazli during the Spring '11 term at College of E&ME, NUST.
- Spring '11