Rutgers University
Economics Department
Intermediate Microeconomics
Fall 2012
Problem Set 4: Chapter 5
1. Demand in Market 1 for X is Qd = 80 p. Demand in Market 2 is Qd = 120 2p. At a price
of $20, which has a larger consumer surplus?
2. Jims utility fun
Rutgers University
Economics Department
Intermediate Microeconomics
Fall 2012
Problem Set 5: Chapter 6
1. Write the equation for the marginal product of labor and capital for each of the following
production functions.
a) Q = K + L
b) Q = 4K 0.5 L
c) Q =
Rutgers University
Economics Department
Intermediate Microeconomics
Fall 2012
Problem Set 8: Chapter 9
1. Demand in Market 1 for X is Qd = 80 p. Demand in Market 2 is Qd = 120 2p. At a price
of $20, which has a larger consumer surplus?
2. If the inverse d
Rutgers University
Economics Department
Intermediate Microeconomics
Fall 2012
Problem Set 9: Chapter 10 - 12
Chapter 10
1. Suppose the government were to impose a 15% tax on newspapers. What other markets (both
product market and input market) should be i
Rutgers University
Economics Department
Intermediate Microeconomics Summer 2012
Problem Set 2: Chapter 3 1. If we observe a customer choosing (x1 , x2 ) when (y1 , y2 ) is available, are we justified in concluding that (x1 , x2 ) (y1 , y2 )?
2. State the
Rutgers University
Economics Department
Intermediate Microeconomics Fall 2012
Problem Set 3: Chapter 4 1. Suppose the government wants to increase the ability of families to pay for college education. Would a $500 income tax rebate differ from a $500 tax
Chapters 1 - 4 Positive Statement vs. Normative Statement o Positive can be tested Ex: If you consume this good, you will get sick. o Normative based on opinion Ex: If this good is bad for you, you should not consume it. Ex: Since this good is bad for you
Econ 320 Summer 2011
Problem Set 1
(Note: The problems and related chapters: problem 1- Chapter 3; problems
2-3: Chapter 4; and problems 4-7: Chapter 5.)
1. From Besanko and Breautigam problems 3.4, 3.6, 3.15, 3.17, 3.18, 3.19, 3.23,
3.24.
2. Let income b
The Solow Model
Production function: Y = F(K,L) = AK^ L^( 1- )
Three sources of economic growth
Capital accumulation: K Up
Population growth: L Up
Technological progress: A Up
We assumed no growth of A: A = 1
Simpler Production Fnc: Y = K^ (EL)^(1- )
Equi
The IS-LM Model
1. IS Curve (goods market, financial market)
2. LM Curve (money market)
3. Shift in either IS or LM curve
4. IS+LM=Aggregate Demand
Y = C(Y-Tbar) + I(r) + G
Y C(Y Tbar) + G= I(r) [national savings = investment]
In LR (classical model), Y=Y
SR Horizontal AS curve from assumption all prices are sticky
SR Upward-Sloping AS curve from assumption that some prices are sticky, but not all
Y=Ybar + (P-Pe) note: >0
Flexible-price firms and sticky-price firms
S = fraction of firms with sticky prices
Simple model of natural rate of unemployment
L = # of workers in labor force
E = # of employed workers
U = # of unemployed
U = U/L = unemployment rate
L=U+E
L is exogenously fixed
s = fraction of employed workers who lose jobs during a given month, (job-s
1. To be familiar with some of the basic terms and concepts that will be used
throughout the book
- production function, consumption function, and investment function
- marginal product of labor (MPL), marginal product of capital (MPK)
- constant/decreasi
Y=C(Y-Tbar) + I(r) + Gbar
Or
Ybar =C(Ybar-Tbar) + I(r) + Gbar
AD curve downward sloping because of investment
Ybar C(ybar Tbar) + Gbar = I(r)
^ Left side = Savings
Firms will expect change in technology
If time is t, technology is A, firms expects increas
ECO 320 - Intermediate Microeconomic Analysis
Midterm Exam 1 - Version 1
October 1, 2014
Lists
(12 points total)
Please enumerate the following lists.
1. List and dene the two welfare theorems.
2. List and briey dene the types of preferences discussed in
Rutgers University
Economics Department
Intermediate Microeconomics
Summer 2012
Problem Set 6: Chapter 7
1. In the short run, are the following examples of xed or variable costs?
a) A manufacturing rm builds a new plant.
b) A doctor rents an oce on a mont
Rutgers University
Economics Department
Intermediate Microeconomics
Fall 2012
Problem Set 7: Chapter 8
1. Under what circumstances would advertising be pro-competitive? Anti-competitive?
2. Draw a graph showing the average total, average variable, and mar
Rutgers University
Economics Department
Intermediate Microeconomics Summer 2012
Problem Set 1: Chapters 1 and 2 1. Give an example of a positive statement. Give an example of a normative statement. 2. Simplify the following expressions: a) 3x4 x3 y 2 y -3
Ch. 1 Introduction
What is Economics? - Economics is the study of the allocation of scarce resources. - trade-off questions: What? How? For whom? - "Price" determine allocations Positive Vs. Normative? Positive Statement - a testable hypothesis about cau
Chapter 4 Consumer Choice
Preferences Utility Budget constraint Constrained consumer choice In the previous chapter, we have been using the demand-supply model. So, how is the individual demand curve decided? How does each individual decide the amount of
Chapter 7. Costs
Short-run costs Long-run costs Lowering costs in the long-run
0. Economic cost and accounting cost
"Opportunity cost": the highest value of other alternative activities forgone. To determine the opportunity of a resource, you need to comp
Chapter 8. Competitive Firms and Markets
We have learned the production function and cost function, the question now is: how much to produce such that firm can maximize his profit? To solve this question, firm has to make sure he can sell all he produces.
Mathematical knowledge 1 Functions of a single variable
Function y = f (x) The first derivative of f with respect to x is f 0 (x) = df . dx
It gives, at each value x, the slope or instantaneous rate of change in f (x). The second derivative of f with res
In-class problem: Consumer Theory
1) If Fred's MRS of salad for pizza equals to -5, then which of the following is true? A) B) C) D) He would give up 5 pizzas to get the next salad. He would give up 5 salads to get the next pizza. He will eat 5 times as m
l LAGRANGIAN MUHFIPEIER .METHOD FOR CONSTRAINED ()VYINllZA'IlUK l.
0..., _.-W _..._i .-
1 Lagrangian Multiplier Method for Constrained Opti-
mization
This method gives us the interior solutions for constrained optimization problems,
Objective