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Unformatted text preview: ECON 321 Intermediate Microeconomics, Fall 2010 Jason Murray Practice MIDTERM 2 1. ( Similar to Equilibrium II Q1 ) Demand is given by: D ( p ) = 400- P . Supply is given by: S ( p ) = 9 P . Derive and graph the market equilibrium price and quantity. Suppose the government introduces a 5 dollar tax. Graph and quantify the deadweight loss associated with this tax. 2. ( Similar to Technology II Q1 and Q2 ) I have a factory that uses Labor, L , and Capital, K , to produce output, y . My factorys production function is: y = f ( L, K ) = LK (1) Plot my output as a function of Labor if Capital is fixed in the short run at K = 10 . Plot my Marginal product of Labor as well. 3. (Similar to Profit Maximization II Q2 ) Marys dancing lessons produce skilled dancers. Exactly four hours of Marys time and one unskilled dancer produces ex- actly one skilled dancer. Write down a function that represents the technology Mary uses to turn hours of her time, h and unskilled dancers, u into skilled dancers, s . Plot the output as a function of h when the supply of unskilled dancers, u is fixed at u ....
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This note was uploaded on 06/16/2011 for the course ECON 321 taught by Professor Murray during the Spring '11 term at South Carolina.
- Spring '11
- Market Equilibrium