TUFTS UNIVERSITY Department of Economics
Hourly Exam #2 Economics 16 Quantitative Intermediate Theory, Micro Professor Linda Datcher Loury Fall 2007 Read each question carefully. Answer both questions. 1) Farms 1-4 all have long term contracts to pro
Ec16. Practice exercises. Profit function. Partial equilibrium analysis.
Students name: _
100 points total
Multiple choice questions:
1
The market demand curve for any good is
a.
independent of individuals' demand curves for the good.
b.
the vertical summ
Ec16. Homework #6. Preferences and utility.
Students Name: _
(100 points total)
Circle the correct answer in problems 1-23 (each multiple choice question is 4 points):
1
Indifference curves
a.
may sometimes intersect.
b.
are contour lines only of a linear
I will have 15 multiple-choice questions (2 points each) and problem sets
similar to the homework assignments (#8,9,10,11) worth of 70 points
(total100 points exam).
For the multiple choice part, focus is on the d
Welfare analysis
Price controls and taxes
Chapter 12 N&S
Economic Efficiency and Welfare Analysis
Sum of consumer and producer surplus
represents the area between the demand
and the supply curve
It measures the total additional value
obtaine
Prot Maximiza-on
PowerPoint Slides prepared by:
Andreea CHIRITESCU
Eastern Illinois University
1
The Nature and Behavior of Firms
A firm
An association of individuals
Who have organized themselves for the
purpose of turning inputs into outputs
Firms
U"lity Maximiza"on
and Choice
PowerPoint Slides prepared by:
Andreea CHIRITESCU
Eastern Illinois University
1
The Interior Solution:
Two-Good Case
First-order conditions for a maximum
Point of tangency between the budget
constraint and the indiff
Cost Func*ons
PowerPoint Slides prepared by:
Andreea CHIRITESCU
Eastern Illinois University
1
Definitions of Costs
It is important to differentiate between
accounting cost and economic cost
Accountants: out-of-pocket expenses, historical
costs, deprec
U"lity Maximiza"on
and Choice
PowerPoint Slides prepared by:
Andreea CHIRITESCU
Eastern Illinois University
1
Indirect Utility Function
It is often possible to manipulate firstorder conditions to solve for optimal
values of x1,x2,xn
These optimal
EC16. Homework assignment 11. Relationships between goods and uncertainty.
Chapter 6 (pp 187-196)& 7 (pp 209-221) in N&S, Due April 17th 2014, in class.
(100 points total)
Students name _
I. Problem sets.
1. There are two individuals, A and B. Individual
Lecture notes
Producer surplus and prots in the
short run
Properties of the Profit Function
Homogeneity in all prices p, w, v
Nondecreasing in output price, P
Nonincreasing in input prices, v and w
Convex in output prices
2
Properties of the
Externali*es and
Public Goods
PowerPoint Slides prepared by:
Andreea CHIRITESCU
Eastern Illinois University
1
13.14
Determination of Equilibrium Prices
*
px
slope =
*
py
Quantity of y C*
C
P
y1
y*
E
y1
U3
U2
U1
P
x1
x*
C*
x1
C
slope =
px
py
Quan
Ec16. Quiz #2 Outline Spring 2014
Chapters 11 (w/o substitution and output effects on pp. 391-395)1 and 12
(w/o welfare effects on pp 438-446); exercises from homework assignments
and lecture handouts.
Chapter 11.
Ec16. Spring 2014 Quiz #2. Students Name:_ANSWERS_
1. For the production function q = k0.5 L0.4 show the mathematical formula for the
average physical product of labor, APL, in the short run when capital input is
fixed at k = 400. (20 points)
With q = k L
Ec16. Production theory. Chapters 9,10. Review concepts and questions
1. Production function
The production function y = f(x)shows the maximum amount of output that can be
obtained from various combinations of inputs x. In the most general n-input case x
Ec16. Practice exercises. Production and Costs. Chapters 9 and 10.
1. Graphically, the average productivity of labor is illustrated by
a.
b.
the slope of the marginal productivity curve at the relevant point.
c.
the negative of the slope of the marginal p
Ec 16. Chapter 3 and 4 Nickolson&Snyder - Practice Exercises.
1. Consider an individual utility function U(x, y) = ln y + 2ln x. The price of x is given
by px and the price of y is py. I is income. Assume
ec16 Outline for exam#3 - Spring 2014
1. Chapters 5 (pp 145 - 174), 6 (pp 187 196):
Relationship between compensated and uncompensated demand curves -
which one is flatter? Income and substitution effects; Slut
Ec16. Midterm examination #1 Outline Spring 2014
Chapter 2 (Concepts of homogeneity and homotheticity, pp57-58; Second-
order conditions and curvature, pp48-51; Elasticities pp.28-29; the Lagrange
multiplier optimization tec
Uncertainty
PowerPoint Slides prepared by:
Andreea CHIRITESCU
Eastern Illinois University
1
The Two-Good Case
How the quantity of x chosen might be
affected by a decrease in the price of y
Shifting the budget constraint outward
The quantity of good y c
Ec16. Homework assignment #10. Slutsky decomposition and welfare measures of price
changes. Due April 15th, in class. Students name: _
1.Consider the utility function U(x,y) = x0.5y0.5. Show the Slutsky decomposition of the
total price effect into the sub
Ec16. Homework #5. Profit function and comparative statics.
1. Find the profit-maximizing level of labor input (l) for a competitive firm if its
production function is given by q=l (note that labor is the only i
Ec. 16 Quantitative Intermediate Microeconomics Sample Hourly Exam #1 1) Assume that the Williams family has an income of $M per month and that its utility function for housing (X) and all other goods (Y) is U(X,Y)=XY+X. The current prices are Px per
Quantitative Intermediate Microeconomics Answers to Problem Set #4
1) Answers a) MPL=q/L=L-1K 2q/2L=(-1)L-2K<0 since (-1)<0 MPK=q/K=LK-1 2q/2K= (-1)LK-2<0 since (-1)<0 b) MRTS=MPL/MPK=L-1K/LK-1= K/L c) If both inputs are changed by the proportion m,
Intermediate Microeconomics Problem Set #4 Due Tuesday, November 6 at 9:30 1) Suppose that the production function is given by q=L K where >0, >0, and +<1. Show that (a) the production function is characterized by diminishing marginal product of labo
Quantitative Intermediate Microeconomics Answers to Problem Set #3 1) Answers a) MPL=q/L=L-1K 2q/2L=(-1)L-2K<0 since (-1)<0 MPK=q/K=LK-1 2q/2K= (-1)LK-2<0 since (-1)<0 b) MRTS=MPL/MPK=L-1K/LK-1= K/L c) If both inputs are changed by the proportion m,
Quantitative Intermediate Microeconomics Problem Set #3 1) Suppose that the production function is given by q=L K where >0, >0, and +<1. Show that (a) the production function is characterized by diminishing marginal product of labor (that is, calcula