University of Toronto, Department of Economics, ECO 204, 2012
–
2013
ECO 204, 2012  2013
HW 1
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________________________________________________________________________________________
N
ote: Please don’t memorize these solutions in the expectation that similar questions will appear on tests and exams.
Instead, try to understand
how
to derive the answer as you’ll be tested on techniques and applications, not on
memorization. Moreover, tests and exams will cover topics and techniques that may not be in these practice problems.
You are urged to go over all lectures, class notes and HWs thoroughly.
Question 1
Consider the following function:
( ) (
)
[ ]
Currently
(a) Suppose that
changes so that
. What is
(b) Suppose that
changes so that
. What is
(c) Suppose that
changes so that
. What is
?
(d Suppose
changes by 1%. What is
?
(e) Suppose
changes by 1%. What is
?
(f) Solve the problem:
(
)
defined on domain
[ ]
Hint: the solution may not be an interior solution (i.e. inside the domain of the function, found by setting
( )
) and
in fact might be a boundary solution (i.e. at the boundary of the domain).
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 Fall '08
 HUSSEIN
 Economics, Microeconomics, Supply And Demand, Christopher Nolan, Department of Economics, following function, commercial price

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