Econ 371 Chapter 1 Homework Answer Key 1. Suppose your satisfaction, S, depends only on your purchases of cheese pizza (CP) and Pacifico beer (PB). Furthermore, assume that satisfaction is measured by the following function: S = (CP*PB). The price of
Chapter 3 Homework Key 1. Consider the utility function U ( x , y )
Due: February 20, 2007
y x with MU x
y / 2 x and MU y
x.
a. Does the consumer believe more is better for each good? Explain.
Since U increases whenever x or y increases, more o
Chapter 7 Homework Key Please Answer All Questions on this homework set. 1. Coldwell Banker is employing 10 acres of land and 50 tons of cement to produce 1,000 parking spaces. Land costs $4,000 per acre and cement costs $12 per ton. For the input qu
Chapter 6 Homework Please answer all questions on this handout. 1. Fill in the spaces in the following table: Average Product of Labor -75 100 100 95 86 75
Due: March 15, 2007
Number of Trucks 2 2 2 2 2 2 2 Remember: MPL
Amount of Labor 0 1 2 3 4
Chapter 9 Homework Key For each of the following situations, using the perfectly competitive model decide how the circumstance might affect the price and quantity of drinks sold at the Airliner Bar. Answer (a) in the short-run, assuming perfect compe
Chapter 4 Homework
Due: September 14, 2007
1. Suppose a consumer only purchases strawberries and bananas. The price of strawberries is $4 per pound and the price of bananas is $1 per pound. The consumer has an income of $100. a. Write the budget co
Econ 371 Chapter 2 Homework Please answer all Questions in the space provided.
Due: August 31, 2007
The following supply and demand functions summarize the market for domestic automobiles:
Qs Qd 2 ,000P 400PSUV 500P 210Px 100,000W 13,750S 125,000E
Chapter 10 Competitive Markets: Applications
Solutions to Review Questions
1. In a long-run equilibrium, a competitive market allocates resources efficiently. As Adam Smith wrote over 200 years ago, it is as though there is an "Invisible Hand" guidin
Chapter 8 Cost Curves
Solutions to Review Questions
1. The long-run total cost curve plots the minimized total cost for each level of output holding input prices fixed. In other words, for a given set of input prices, the long-run total cost curve re
Chapter 5 The Theory of Demand
Solutions to Review Questions
1. The price consumption curve plots the set of optimal bundles for two goods, say X and Y, by changing the price of one good while holding the price of the other good and income constant.