Quiz 2-2

Quiz 2-2 - [4] (i) Check whether Q is homogeneous function...

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Quiz 2-2 Total Marks 20 Lahore School of Economics BSC –II Section A Mathematical Economics II Spring 2012 Name:_____________________ Section:_______________ 1. (a) A manufacturer sells two related products, the demand for which are estimated by the following two demand functions: [6] Where is the estimated demand (in thousands of units) for product i and is the price of the product i (in dollars). The firm wants to determine the price it should charge for each product in order to maximize total revenue from the sale of the two products. Check also second order conditions for revenue maximization. (b) Given the production function , show that
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Unformatted text preview: [4] (i) Check whether Q is homogeneous function or not. (ii) Under what condition Euler’s theorem holds? (iii)Find relative shares of K and L, if each input is assumed to be paid by the amount of its marginal product. 2. (a) Check the Cob-Douglas function [5] is quasiconcave, quasiconvex, strictly quasiconcave, strictly quasiconvex or neither. (b) Given the function and the constraint: [5] (i) Use the Lagrange-multiplier method to find the stationary values of z . (ii) Determine whether the stationary value of z is a maximum or minimum....
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This note was uploaded on 03/23/2012 for the course ECON 201 taught by Professor Cowell during the Spring '10 term at LSE.

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