{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Practice Test

# Practice Test - McMaster University Department of Economics...

This preview shows pages 1–6. Sign up to view the full content.

McMaster University Department of Economics Spring 2006 Term 1 ECON 2G03/2X03 Page 1 of 7 Midterm Test #2 Monday June 5, 2006 Time: 1:30 – 3:30 (2 hours) Instructor: H Holmes INSTRUCTIONS: Answer all questions in the space provided. Show all work; part marks are available. NAME: _____________________________________________ STUDENT ID#: ______________________________________ MUGSI ID: _________________________________________ TOTAL MARKS AVAILABLE: 55

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
2 1. Mathematically prove that a perfectly competitive firm will maximize profit by producing a level of output y such that price equals marginal cost. (5 marks) 2. Demand for a good y is given as y = 250 - .8p. What is the elasticity of demand when p = \$100 ? (5 marks)
3 3. A perfectly competitive steel producing firm’s short run cost function for tonnes of steel, y, is SRTC = 40y + 2y 2 + 5 Market demand is y = 1000 – 15p. There are 100 identical firms in the industry. a) Derive the market supply curve. (6 marks) b) How much will an individual firm supply? (6 marks) c) What is the firm’s profit? (3 marks)

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 6

Practice Test - McMaster University Department of Economics...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online