Indicator Name Agricultural machinery, tractors Fertilizer consumption (% of fertilizer production) Fertilizer consumption (kilograms per hectare of arable land) Agricultural land (sq. km) Agricultural land (% of land area) Arable land (hectares) Arable l
The process can be infinitely repeated until p=MC. That is, each firm can set a lower and lower
price until they cannot set a lower price.
So, the Bertrand model even with N=2 firms we have competitive industry prices
Cournot vs. Bertrand
The Cournot and
Solutions Manual
Corporate Finance Ross, Westerfield, and Jaffe 9th edition
CHAPTER 1 INTRODUCTION TO CORPORATE FINANCE
Answers to Concept Questions 1. In the corporate form of ownership, the shareholders are the owners of the firm. The shareholders elect
Example:
K 24, and L (eastward), we move from A to B to C (peak).
f L because we were fixing K (in particular,
Given the green line is our TP when Q
fixing it at K = 24).
MPL change in Q / change in L
MPK
change in Q / change in K
Q / L |K is held cons ta
= cte
(i.e. output rises by the same percentage as the percentage increase in
inputs)
Fig.(B)
< decreasing (i.e. output rises by a smaller percentage than the percentage
increase in inputs)
Fig.(C)
Example:
Let Q1 & Q2 two different Output levels, both ha
MR2
2)
14 0.5Q2
MC
MR2
10 14 0.5Q2
0.5Q2
Q2
P2
14 10 4
8
14 0.25 8 14 2
12
Ex.
QB , PB
1.15 (Business travelers)
QV , P
V
1.52 (Vacation travelers)
MC=10
1)
p MC
P
2)
pB
IEPR for Business travelers
IEPR for Vacation travelers
p MC
p
1
EQB , PB
1
p 10
p
1
CARTEL
Cooperation by individual entities in order to max joint profits, example OPEC
Analysis: same as the one in a multiplant monopoly. That is, we can determine the
optimal price and production for the cartel by the same process we used for multiplant
Econ 301, Dr. Rosenman, Spring 2016. HW 1
1. At WSU football games in Martin Stadium student section usually fills up. There are no reserved seats so
some students line up early to get good seats. Other students arrive later, and get lesser seats. Non-stu
EconS 301 Chapter 11
Monopoly
Unlike firms who face perfect competition and therefore have no choice over what
quantity and price to set for their product, monopolies set the market price for their good.
What keeps them from setting an infinitely high pri
Output: Note that if Q , then the demand for both K and L increase. Hence, both K and
L are normal inputs.
6
Price Elasticity of Demand for Labor: The percentage change in the costminimizing quantity of capital with respect to a 1 percent change in the pr
TFC
TFC
TFC
In the short run, we can split the cost between the cost that varies (Total Variable Cost)
and the cost that is fixed, Total Fixed Cost (hence short run). This is depicted in the graph
above where the slope of the Short Run Cost Curve is deter
Note that
MRSx,y = MUx/MUy = y/x so we more from left to the right ( x), we get
smaller ratios,
smaller MRSx,y (diminishing).
b) Similar, but for U2 = 200
Not graded: Learning-by-doing 3.4. Increasing MRSx,y
U = Ax2 + By2
MUx = 2Ax
MUy = 2By
MRSx,y
MU x
M
Coke
Price Elasticity of Demand Q,P
Cross-Price Elasticity of Demand
Income Elasticity of Demand
Pepsi
-1.47
0.52
0.58
-1.55
0.64
1.38
SO a 1% in the price of Coke causes a 1.47% drop in the Qd of coke, but a 0.52% increase in the Qd of
pepsi. This shows
EconS 301, Dr. Rosenman, Spring 2016. HW 2
1. The New York City Transit system runs both buses and subways. Buses are slow, inefficient
and crowded. Subways are more efficient, fast and underutilized. Suppose the cost for each
is $1.00, and currently the
EconS 301, Dr. Rosenman, Spring 2016. HW 3
1. For the following sets of goods draw two indifference curves, U1 and U2, with U2 > U1. Draw each
graph placing the amount of the first good on the horizontal axis.
a) Travel by subway or by bus (assume that ea
Attached is the data and I have transformed it taking logs. Look under "Analysis." I
also added a variable to capture the dramatic increase in spending during WWII. Use
this in the regressions. So now you'll have three variables on the right hand side,
in
Answer the following questions and hand in the assignment by the end of class.
List the names of your group
Transform the data properly. (1 point)
1. What are the coefficients of the first regression equation? List them. (1 point)
Is general government co
EconS 301
Written Assignment #6
Due date: October 27th, 2016.
Exercise #1. Consider a firm with the following Cobb-Douglas product function for labor and
capital
1/3
= 8
1/2
a) Find the marginal rate of technical substitution, , for this firm.
b) Solve t
EconS 301 Intermediate Microeconomics
Chapter 2 Demand and Supply Lecture notes
In chapter 2 we deal with demand and supply analysis in perfectly competitive markets. Perfectly
competitive markets consist of a large number of buyers and sellers. In compet
Example:
Food / all other goods in China
0,1 , but o ?
f
We know that:
f
food
If
f
0 , then
1
o
1
1
o
1
1
o
f
1
other
, which is >1 since the expenditure share, theta, is between 0 and 1.
1
1 , which is the lower bound.
1
0.6 , and in 2005
According to th
0K consumers income
0L income needed to purchase basket B at the new prices of x
0K-0L=KL is the CV
The amount of money that the consumer will be willing to give up, after the price change,
in order to maintain the original utility that he had before the
Example:
Lending, rL = 0.05
Next year he will have 13,200 from tomorrows income = 13,200
10,000 (1+0.05) from savings
= 10,500
-23,700
(Vertical intercept, all of consumers income was consumed next year)
Borrowing, rB = 0.10
Today I can have : 10,000 from
Example
U(x,y) = xy
MUx = y, MUy = x
I = 800, px = 20, py = 40
B.L.
1) pxx + pyy = I
20x + 40y = 800
y/x = 20/40
2y = x
Tangency Condition 2) MUx/MUy = px /py
Plug (2y=x) back into the B.L. equation so that we only have one
variable
20(2y) + 40y = 800
80y
Example:
STC = 100 + 20Q + Q2 , then MC = 20 + 2Q
FC
TVC
a) AVC = (20Q + Q2)/Q = 20 + Q
b) Min AVC
We know that this minimum occurs where MC = AVC. Then,
20 + 2Q = 20 + Q
2Q = Q
Q=0
Then min AVC = 20 + 0 = 20.
c)
a. Short-run Supply Curve
For p < 20, we h
1
CHAPTER TWO PROBLEMS 1. Your corporation has the following cash flows: Operating income $250,000 Interest received 10,000 Interest paid 45,000 Dividends received 20,000 Dividends paid 50,000 If the applicable tax table is as follows: Taxable Income Rate
1. _A_ Assets that qualify for interest cost capitalization include a. assets under construction for a company's own use. b. assets that are ready for their intended use in the earnings of the company. c. assets that are not currently being used because o
The AS-AD Model
The AS-AD Model versus the IS-LM Model
The AS-AD Model is not more complicated than the IS-LM Model. IS-LM can only deal with the demand side of the economy. Any increase in output is only an increase in aggregate demand. IS-LM cannot dea
MAT 200 Statistics Final Examination (Winter 2011)
NAME: _
This is a 100 question multiple choice examination covering all the material covered in the course. Part I: Introduction to Statistics 1. The process of using sample statistics to draw conclusions
Data List: 20 real gdp per capita Data Updated: 2011-09-01 FRED (Federal Reserve Economic Data) Link: http:/research.stlouisfed.org/fred2 Help: http:/research.stlouisfed.org/fred2/help-faq Economic Research Division Federal Reserve Bank of St. Louis Serie