73-240 Spring 2015
73-240 Problem set 0
Due Wednesday Jan. 21st in CLASS
From the Syllabus:
1. Homework must be turned in on the day it is due (usually on a Friday). This homework
only should be turned in IN CLASS. Do NOT leave it under my oce door. Late

73-240 Spring 2015
73-240 Problem set 0
SOLUTIONS
Problem 1: Mathematical Preliminaries
This question asks you to work out some basic examples with logarithms and derivatives
(and tells you why we will need them throughout the semester).
1. Optimality con

73-240 Spring 2015
73-240 Problem Set 3: Part I
Due Friday, March 27th by 4:30pm
From the Syllabus:
1. Homework must be turned in on the day it is due in the undergraduate program oce
in Tepper 139. Late homework will NOT be accepted unless you are sick a

73-240 Spring 2015
73-240 Recitation 4
This Version: February 6, 2015
1 Big Exercise for Today: The US Household
Today we study the representative household. Suppose that the utility function is given by
U (C, l) = log(C) +
1
log(l)
Where C is consumption

73-240 Spring 2015
73-240 Problem set 1
Due Friday Jan. 30th
From the Syllabus:
1. Homework must be turned in on the day it is due in the undergraduate program oce
in Tepper 139. Do NOT leave it under my oce door. Late homework will NOT be
accepted unless

73-240 Spring 2015
73-240 Problem Set 2
Due Friday Feb. 13th by 4:30pm
From the Syllabus:
1. Homework must be turned in on the day it is due in the undergraduate program oce
in Tepper 139 by 4:30pm. Late homework will NOT be accepted unless you are sick
a

73-240 Spring 2015
73-240 Problem set 1
Due Friday Jan. 30th
From the Syllabus:
1. Homework must be turned in on the day it is due in the undergraduate program oce
in Tepper 139. Do NOT leave it under my oce door. Late homework will NOT be
accepted unless

Solutions to Exam II
1. If the government training program is implemented, the
total variable cost of production at every level of output
will fall by 10%. This implies a fall in the marginal and
average variable cost of production of 10% at every level o

Solution to Quiz 1
If each unit of food requires one unit of labor and the country has 400 units of labor, then
the maximum number of units of food it can produce is 400. In contrast, if the first unit
of clothing requires one unit of labor but subsequent

Solutions to Exam III
1. The total willingness to pay for cleaning up the lake is 250 x $25 + 250 x $35 =
$15,000. This exceeds the cost of $10,000 of cleaning up the lake. Therefore, it is
economically efficient for the lake to be cleaned up.
If resident

Solutions to Exam I
Consider first sellers that were taxed $.20 in round 3. The
lowest price at which they could sell their unit equaled their
cost plus $.20. The lowest-cost sellers had a cost of
$1.40. Therefore, they would sell their unit at a price of

Quiz 4
Local governments regulate the price of electricity. Suppose that last year the total
variable costs of electricity producers increased by 10% at every level of output and the
total fixed costs of electricity producers increased by 10%, but the gov

Quiz 3
Bus service in many municipalities, including Pittsburgh, is a losing proposition. The
buses are only partially filled and the cost of the bus service exceeds the revenues the city
of Pittsburgh earns from providing the bus service.
The city is con

Quiz 1
Consider a country that produces two goods, food and clothing. Suppose both
goods are produced using only labor, the only productive resource of the
country. Assume there are a total of 400 units of labor to produce food and
clothing. Suppose that

Quiz 2
Consider a consumer that consumes two goods, food and clothing. Suppose
that between 1980 and 2000 the price per unit of food doubled, the price per
unit of clothing increased by 75%, and the consumers income increased by
75%. Assume that the consu

Solution to Quiz 3
If the city decreased the bus fare, the quantity demanded of bus rides would increase and
the number of riders would be expected to increase. Total revenues would rise, however,
only if the price elasticity of demand for bus service wer

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73-240 Spring 2015
73-240 Recitation 3
Exercises
1. Understanding Income and Substitution Eects. Demonstrate the eect of an increase
in the wage rate, graphically, on the consumers optimal choice of consumption and
leisure. Please analyze the case where t

73-240 Spring 2015
73-240 Recitation 5
This Version: February 13, 2015
Exercises (Competitive Equilibrium)
Compute a competitive equilibrium for the following economy:
No government: G = T = 0
1
1
Production function: Y = 2K 2 N 2 , K = 1
Utility: U (C

Intermediate Macroeconomics - 73240
Practice Final Exam
Name:
User Name:
1. Correctly write you name and user name!
2. This exams contains 12 pages.
3. The nal answer must be written in the space provided.
4. The exam lasts 180 minutes. You may leave afte

Intermediate Macroeconomics - 73240
October 27, 2014
Sample MIDTERM II
Name:
User Name:
1. Correctly writing you name and user name gives you 25 points!
2. This exams contains 7 pages.
3. The nal answer must be written in the space provided.
4. The exam l

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Intermediate Macroeconomics - 73240
PRACTICE MIDTERM 1
12%?me
SCHOOL OF BUSINESS
Name:
User Name:
1. This exams contains 12 pages.
2. 'Ihe nal answer must be written in the space provided.
3. The exam lasts 80 minutes. You may leave after 60 min.
4. No ca