Midterm 2 - Summer 2005

# Midterm 2 - Summer 2005 - MIME 310 ENGINEERING ECONOMY...

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MIME 310 ENGINEERING ECONOMY QUIZ #1 – Monday, May 9, 2005 – 8:45 to 9:30 Page 1 VERSION #1 FAMILY NAME / IN FAMILY NAME / INITIAL TIAL STUDENT ID # STUDENT ID # S O L U T I O N S PART 1. Multiple-choice Statements and Short Problems – Circle the correct an- swer on this paper and record it on the computer answer sheet. (10 points each for a total of 60) Note : There are no penalties for incorrect answers. 1. Last month, you sold 10 000 stereos nationwide at \$400 each. The month before that, you sold 9 000 stereos at \$410 each. Next month, you are thinking of cutting the price even further to \$389.99. Assuming that (i) the market demand for your product is linear, and (ii) all else remains constant, what is your prediction for next month’s sales? A) 10 100 units B) 11 000 units C) 11 001 units D) 11 051 units E) 12 000 units 2. The demand curve for peanuts is Q D = 20 000 - 5 P, in which Q D is measured in tonnes and P is the price per tonne. The price elasticity of demand at P=\$800 is: A) -4 B) +4 C) -0.25 D) +0.25 E) None of the choices given above Use the following information to answer questions 3 and 4 The demand and supply functions for a particular product are: Q D = 189 - 2.25 P Q S = 124 + 1.5 P Note : Answers are exact within two decimal places. 3.

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Midterm 2 - Summer 2005 - MIME 310 ENGINEERING ECONOMY...

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