Summer 2008 - Quiz 2

Summer 2008 - Quiz 2 - VERSION 1 FAMILY NAME / INITIAL...

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VERSION 1 1 FAMILY NAME / INITIAL STUDENT ID # SOLUTI ONS MIME 310 ENGINEERING ECONOMY – QUIZ #2 May 8, 2008 – 8:30 to 9:15 Short Problems – Circle the correct answer on this paper and record it on the com- puter answer sheet. All questions are worth 1.25 points each for a total of 10. Note : There are no penalties for incorrect answers. 1. A firm with sales of $1 million, a net after-tax income of $30 000, total assets of $1.5 mil- lion, total liabilities of $750 000 and no preferred equity has a return on equity of: A) 20 % B) 15 % C) 4 % D) 3 % E) None of the choices listed above Use the following information to answer questions 2 and 3. The demand and supply functions for a particular product are: Q D = 189 - 2.25 P Q S = 124 + 1.5 P 2. The market equilibrium price and quantity are, respectively: A) $84.00 and 65 B) $82.67 and 150 C) $17.33 and 150 D) $150.00 and 313 E) None of the choices listed above 3. At market equilibrium, the price elasticity of supply is: A) -2.25 B) 0.17 C) 0.26 D) 1.50 E) None of the choices listed above For supply, dQ/dP: 1.5 E S : 1.5 / (150 / 17.33) = 0.17 At market equilibrium, 189 - 2.25 P = 124 + 1.5 P 0.75 P = 65 P=17.33
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This note was uploaded on 01/22/2012 for the course MIME 310 taught by Professor Bilido during the Summer '08 term at McGill.

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Summer 2008 - Quiz 2 - VERSION 1 FAMILY NAME / INITIAL...

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