Problem Set 1
1. Boy and Girl allocate their consumption between two goods: hats and bats. The price of hats is $4 each and the price of bats is $8 each. Boy's marginal utility of the last hat consumed is 8 and his marginal utility of the last bat is 24.
Problem set 9 1. Consider the lemons model with variable quality discussed in class. Quality of sellers is
denoted by v, and the buyer is willing to pay a price equal to the average quality of a car. The buyer does not know the quality of the car he buys:
Intermediate Microeconomics
Problem Set #3
1. By studying, Wendy can produce a higher grade, G, on an upcoming economics exam. Her (CobbDouglas) production function for G depends on the number of hours she studies calculus problems,
C , and the number of
Intermediate Microeconomics
Problem Set #2
1. The supermarket cashier asks Candace to give a dollar to support cancer research. Suppose Candaces utility function is specied as follows: U (X, c) = X + c where X is the number of dollars she
has to spend on
ECON 1100: Intermediate Microeconomics Instructor: Sandra Orozco Homework 3 Due date: October 6, 2010 IMPORTANT NOTE: Do not forget to label your graphs properly! 1. (10 points) Suppose the production of airframes is characterized by a Cobb Douglas produc
ECON 1100: Intermediate Microeconomics Instructor: Sandra Orozco Homework 2 Due date: September 20th, 2010 IMPORTANT NOTE: Do not forget to label your graph properly! 1. The utility that Ann receives by consuming food F and clothing C is given by U( F, C)
Intermediate Microeconomics
Problem Set #1
1. Homer and Barney subsist solely on the consumption of two good: beer and donuts. The price of
beer is $4 each and the price of donuts is $1 each. The marginal utility Homer received from the last
beer he consu
Intermediate Microeconomics
Midterm #1
1
2
1. (25 points total) Suppose an individuals utility function is given by U (x, y ) = x 3 (y 6) 3 , where we interpret 6
as the minimum quantity of good y that the individual must consume to remain alive and well.
ECON 1100: Intermediate Microeconomics Instructor: Sandra Orozco Homework 1 Due date: September 13th, 2010 IMPORTANT NOTE: Do not forget to label your graphs properly! 1. The demand for beer in Japan is given by the following equation: Qd = 700 - 2P - PN
Intermediate Microeconomics
Midterm #2
1. (35 points total) The market for matchbooks is perfectly competitive, with 25 rms participating. Each matchbook manufacturing rm has the same short-run total costs for any given quantity of output, which is given
Economics 1100: Intermediate Microeconomics
Spring 2011
Problem Set 8
1. Assume Johnny's utility function is U (W ) = W a . a. For what values of a is he risk averse, risk neutral, and risk loving? From now on, assume that a = . Johnny owns a house that w
Economics 1100: Intermediate Microeconomics
Spring 2011
Problem Set 6
1.
The two figures show the payoffs for two firms, A and B, in two different games. Answer the following two questions in both cases (explain your answers carefully). a. Determine the d
Intermediate Microeconomics
Problem Set #4
1. Consider a water heater manufacturing company. The number of water heaters manufactured per
day, q , is a function of the number of workers per day, L, and the number of square feet of sheet metal
per day, S .
ECON 1100: Intermediate Microeconomics Instructor: Sandra Orozco Homework 4 Due date: October 13, 2010 IMPORTANT NOTE: Do not forget to label your graphs properly! Abbreviations: SMC= short-run marginal cost SAC= short-run average cost STC= short-run tota
Final - 40 MC
Conditionally non-cumulative (chapters refer back to many concepts of earlier chapters)
International Trade:
(Chapter 2 model of comparative advantage)
Absolute and comparative advantage
Computer opportunity cost of 2 goods in 2 countries ba
Chapter 10
Solutions to Problems
10.2
With a $3 tax, setting Q d = Q s implies
10 .5( P s + 3) = 2 + P s
Ps = 7
Substituting into the equation for P d implies P d = 10 . Substituting this price into the
equation for quantity demanded implies Q = 5 million
Intermediate Microeconomics
Problem Set #7.5
Optional Extra Credit Assignment
1. In an alternate reality where they are not shot and killed, Bonnie and Clyde have been taken into
custody by the authorities. They are both given the option to confess to the
Intermediate Microeconomics
Problem Set #9
1. For each of the following utility functions, determine if the individual is risk-averse, risk-neutral, or
risk-loving.
For risk preferences, we need only check the sign of the second derivative. U < 0 implies
Chapter 9
Solutions to Problems
9.6
a)
Since the firm is producing in a perfectly competitive market, the firm
views the output price as exogenous. It should produce up to the point at
which P = SMC(Q), that is, so that 10 = Q. So it should produce 10 uni
Chapter 11
Solutions to Problems
11.5
Recall that the MR curve can easily be derived from the demand curve when the latter is
written in the inverse form. The inverse demand curve is P = 50 (Q/20) so the marginal
revenue curve is P = 50 (Q/10) (using the
Chapter 2
Solutions to Problems
2.1.
a.) When the price of nuts goes up, quantity demanded falls for all levels of price
(demand shifts left). Beer and nuts are demand complements.
b.) When income rises, quantity demanded increases for all levels of price
Intermediate Microeconomics
Problem Set #5
1. In a small, but perfectly competitive market for pineapples, there are 8 identical growers. Each
grower has the following cost function C = 2 + 2q 2 , where q is thousands of pounds of pineapples
produced.
a)
Chapter 6
Solutions to Problems
6.2
The input combination gives Q = 97 so it is infeasible.
b)
Q = 129.6 which is greater than 100, so feasible, but inefficient.
c)
Q = 112 so again feasible but inefficient.
d)
6.3
a)
Q = 100 therefore the required output
Intermediate Microeconomics
Problem Set #6
1. Consider the following exchange economy with two consumers and two goods, x and y . Consumer
1 initially has 1 unit of x and no units of y so her initial endowment is (ex , ey ) = (1, 0). Consumer
1
3
4
4
1s p
Intermediate Microeconomics
Final Exam
This is an open book, open notes exam. You have the entire period (195 minutes) to nish this exam. There are
four (4) questions. You must answer all parts of all questions. Each question has several parts, with the l
Solution: Final Examination - Econ 1100
Sourav Bhattacharya
Intermediate Microeconomics
1. Production technology is given as q = L2 K: In the short run, since K is xed at K = 1;
the production function is q = L2 :1 = L2 :
(a) L2 = 256 ) L = 16: Price of l
Intermediate Microeconomics
Problem Set #4
1. Consider a water heater manufacturing company. The number of water heaters manufactured per
day, q , is a function of the number of workers per day, L, and the number of square feet of sheet metal
per day, S .
Intermediate Microeconomics
Midterm #1
This is an open book, open notes exam. You have 90 minutes to nish this exam. You must
answer all parts of all questions. Show your work as much as possible. If I can see the process you
used to reach your answer, yo
Intermediate Microeconomics
Problem Set #8
1. Suppose Firm A and Firm B compete in quantities and face a total market demand curve of p =
450 5Q. Firm A has constant marginal costs of M CA = 50 and Firm B has constant marginal costs
of M CB = 25. They mus