ECON 204
Study Questions 5
Profit maximization, Cost Minimization
1)
Acme Co. is currently producing 90 widgets/day using 100 worker hours and 50 Widge-o-matic machine hours. At this input bundle, the TRS(Technical Rate of Substitution) = -2 (assuming mac
ECON 204 MICROECONOMICS - HOMEWORK 3
Date due: November 9, 2016, in lecture class.
1. (10 points) Consider perfect complements type of preferences. (i) Can an increase in
the price of good 1 lead to an increase in the demand for good 2? Illustrate your
an
Econ 204C, Fall 2016
Problem set 2
1. Use a labor market supply and demand model to answer the following questions.
a. From an equilibrium position a minimum wage is set above the going wage.
Sketch graph this possibility and show 1) the amount of new ent
Econ 204C, Fall 2016
Problem set 3
1. The Acme Seed Company charges $2/lb for the first 10 lb you buy of marigold seeds each week
and $1/lb for every pound you buy thereafter. If your income is $100/wk, draw your budget
constraint for the composite good a
ECO 204
STUDY QUESTIONS
Budget Constraint
1. Consider a family that lives in Southern California, and has an income of $4,000 per month, which it spends on electricity and other goods. Suppose that in 1999, the price of electricity was $40 per megawatt ho
ECON 204 STUDY QUESTIONS 4
Equilibrium 1) Suppose that demand for broccoli is given by 3 = 4002 , and supply is given by =
a) What is the price elasticity of demand when P=100? (Hint: Your answer should be a number) Show how you calculated it. b) Find the
ECON 204 STUDY QUESTIONS 3
Utility, Demand
q.1) Suppose that a consumers utility function for Prices are denoted by and , and income by m. a) Find the demand functions for goods? Why? and
and
takes the form: U( , and ). Are and
)=
/
/
(as a function of m,
ECON 204
STUDY QUESTIONS 9
Price Discrimination, Externalities 1) A monopolist is deciding how to allocate output between two markets. The two markets are separated geographically (East Coast and Midwest). The monopolists total cost is TC = 5 + 3(Qa + Qb)
ECON 204 STUDY QUESTIONS 7
Firm Supply, Industry Supply
1. Suppose that a firm uses three inputs to produce its output: capital (K), labor (L), and materials / (M). The firms production function is given by Q(K; L; M) = / / . The prices of capital, labor,
ECON 204
STUDY QUESTIONS 8
Monopoly 1) Consider a monopolist whose cost function is: c (y) = 2y, where y is the amount of output produced by the monopolist. The monopolist faces a market demand curve described by equation (p) = 11p/2, where is the quantit
ECON 204 STUDY QUESTIONS #2
Preferences 1) I like coee but when I drink more than 2 cups, it makes my stomach a bit upset, so after 2 cups, drinking more coee makes me worse o.The problem gets worse and worse, the more coee I am forced to drink (above 2 c
ECON 204 MICROECONOMICS - HOMEWORK 3
Date due: October 26, 2015, in lecture class.
1. (5 points) My preferences are represented by the utility function u = ln(x1) + ln(x2).
One unit of good 1 and one unit of good 2 are perfect substitutes for me. Is this