Micro chapter 5 notes
10/7/16
Firm- an entity that produces and sells goods, with the goal of maximizing profits
Equimarginal principle- applies both to the behavior of firms and to the behavior of individuals
Marginal benefit- the additional benefit gain
ECON 4465
Dr. McIntyre
Problem Set #1
Practice with derivatives
Dierentiate the following expressions. Show your work and when appropriate, simplify your algebra as
much as possible.
1.
2.
3.
4.
5.
6.
7.
8.
9.
p
f (s) = 2 + 1 s2 + 3 (s + 1)
2
2
t +1
t +
ECON 3303: MICRO THEORY
Prof. McIntyre
McDaniel College
Fall 2008
Problem Set #1
Due: Monday, 22 September
Landsburg, Ch. 2
N1, 7
Landsburg, Ch. 3
21, 23
Supplement problems
#1 Suppose you are offered the following tiered mobile phone plan:
For a flat fe
ECON 3303: MICRO THEORY
Prof. McIntyre
McDaniel College
Fall 2008
Problem Set #3
Due: Wednesday, 22 September
Landsburg, Ch. 4
22, 23, 25
Landsburg, Ch. 5
11
Landsburg, Ch. 6
4, 10, 12
ECON 3303: MICRO THEORY
Prof. McIntyre
McDaniel College
Fall 2008
Problem Set #4
Due: Monday, 27 October
Landsburg, Ch. 7
N7, N8, 2, 16, 17
Supplement Problem
Suppose the market for human kidneys (for transplantation purposes) is described by the
followin
ECON 3303: MICRO THEORY
Prof. McIntyre
McDaniel College
Fall 2008
Problem Set #2
Due: Wednesday, 24 September
Here is a classic micro problem that will give you some additional practice with budget
constraints, indifference curves, and how these tools can
ECON 3303: MICRO THEORY
Prof. McIntyre
McDaniel College
Fall 2008
Problem Set #6
Due: Wednesday, 3 December
Landsburg, Ch. 11
N2 [skip part (d)], 5, 13
Hint for N2: Rearrange the given demand curve into Price as a function of quantity form.
Then go from t
ECON 3303: MICRO THEORY
Prof. McIntyre
McDaniel College
Fall 2008
Problem Set #5
Due: Wednesday, 5 November
Landsburg, Ch. 8
1, 2, 4, 31
Hint for Problem 8.31:
substitutes.
Landsburg, Ch. 10
N2, 10, 27, 31
Popeye and Wimpy view hamburgers and spinach as p
ECON 4465: Mathematical Economics
Fall 2003
Prof. McIntyre
First Take-home Exam
Instructions. This take-home exam will be due on Wednesday, October 8 at 10:20 am. The exam is worth 100 points.
Answer all the questions. You may use your text, notes, and if
ECON 4465
Dr. McIntyre
Problem Set #2
Profit maximization exercise
1
Consider a competitve rm with production function y = [xa + x a ] a that faces factor prices w 1 and w2 respec1
2
tively. Derive this firms factor demand functions.
The firms profit func
Econ 4465
Prof. McIntyre
Answers to First Take-home Exam
1.
The function (x1 ; x 2 ; : : : ; x n ) is concave if its Hessian matrix
0
11 12 1n
B 21 22 2n
B
H=B .
.
@ .
.
.
1
C
C
C
A
n1 n2 nn
Pn
is negative definite. We know, however that (x1 ; x 2 ; : :
ECON 4465
Dr. McIntyre
Problem Set #3
Market structure
Due: Friday, 26 September
2
Consider an industry with two firms, each having total costs given by Ci (yi ) = yi . The (inverse) demand curve facing
this industry is:
P (Y ) = 100 Y;
where Y = y 1 + y2
Stat 2215
Spring 2002
Introductory Statistics
R. Claycombe
First Exam
Write all answers in your blue book and show all work there. Return your exam in your blue book.
22 pts.
1) Consider the following table that shows the education levels of employees at
ECON 3303
Micro Theory
Dr. McIntyre
Answers to Problem Set #2
Supplement
a) Consumers are initially at point A, consuming F units of food. The food stamp program decreases the effective price
of food, so it will cause the budget constraint to rotate outwa
ECON 3303
Micro Theory
Dr. McIntyre
Answers to Problem Set #1
Landsburg, Ch. 2, Problem N1
a) Table:
Rewiring
Paneling
Electrician 1/2 paneling 2 rewirings
Carpenter
2/3 paneling 3/2 rewirings
b) The electrician has the comparative advantage in wiring; th
ECON 3303
Micro Theory
Dr. McIntyre
Answers to Problem Set #4
Landsburg, Ch. 7, Problem N7
a) The profit maximizing condition for all firms is to set M R = M C. In a competitive market, M R = P, so profit
maximization requires firms to set P = M C. In the
ECON 3303
Micro Theory
Dr. McIntyre
Answers to Problem Set #3
Landsburg, Ch. 4, Problem 22
With Nestles crunch bars the only good consumed, an individuals budget constraint would look like this:
I = pN n,
where n is the number of candy bars consumed and p
ECON 3303
Micro Theory
Dr. McIntyre
Answers to Problem Set #6
Landsburg, Ch. 11, Problem N2
a) First rewrite the given demand function as P = 100 Q. We will do this problem in terms of quantities and work out
the prices from there. Since there are two fir
ECON 3303
Micro Theory
Dr. McIntyre
Answers to Problem Set #5
Landsburg, Ch. 8, Problem 1
The number of brownies one would buy at $1 is somewhere between 12 and 36.To see this, refer to the chart below.
Because the consumer chooses to buy the second doze
Chapter 6
DYNAMIC BEHAVIOR
We now add another layer of sophistication to our analysis: dynamics. We know from our
study of intertemporal choice, that real world decisions in economics are characterized
by the fact that individuals include time in their de