Midterm Exam Econ 2009C Solution
Question 1 Short Questions (20 points)
(a) (5 points)
Consider the demand for product X is described by
QX = 1, 800 0.4PX + 0.8PY + 0.06I,
(1)
where QX is the quantity demanded of product X, PX and PY are the prices of X a
Chapter 14: Problem Solutions
1. The president of the Martin Company is considering two alternative investments, X and Y. If each investment is carried out, there are four possible
outcomes. The present value of net profit and probability of each outcome
Sample
Midterm Exam Econ 2009C, October 15, 2015
Instructor: Heng Xu
Time allowed: 2.5 hours
In answering each question you must show all your steps and derivations to receive full marks
You are NOT permitted to consult any notes or books during the exa
Department of Economics
Carleton University
ECON 2009H Managerial Economics
ASSIGNMENT 1 - Due Oct 3 at the beginning of the tutorial
USE A COVER SHEET AND STAPLE YOUR ANSWER PAGES
1. (10 points) Which of the following would be likely to reduce (shift to
ECON 2009
Econ 2009H
Practice problems on production theory
1
ECON 2009
Problem 1 (Allen et al, Ch. 5, Exercise 3)
The Ascot Corporation, which produces stationery, hires a consultant
to estimate its production function. The consultant concludes that
Q =
ECON 2009
Econ 2009
Practice problems on demand theory
1
ECON 2009
Problem 1
The Johnson Robot Companys marketing managers estimate that the
inverse demand curve for the companys robots in 2012 is
P = 3, 000 40Q
where P is the price of a robot and Q is th
ECON 2009 C
Quiz 2
2015 Fall
30 Minutes, November 12, 2015
Note: You have to show all your steps and derivations carefully when answering each question;
You are allowed to consult notes and books; You are not allowed to communicate with one
another; Simpl
ECON 2009 C
Assignment 1
2015 Fall
Due Date: Thursday in class, September 24, 2015
Q1 (5 points)
Tuition and fees at Carleton University are $7,000 per year. If Sara starts college this year she
must quit her $60,000 per year job. Heng is unemployed and a
MANAGERIAL
ECONOMICS:
THEORY, APPLICATIONS, AND CASES
W. Bruce Allen | Neil A. Doherty | Keith Weigelt | Edwin Mansfield
Chapter 7
PERFECT COMPETITION
OBJECTIVES
Market Power
A firms pricing market power depends on its
competitive environment.
In perfe
Breaking Down Via Rail:
A Managerial Economics Perspective
(Objective xx)
VIA Rail is a state-owned transportation company that covers the Canadian territory. The
railways made it easier to travel around the country to areas that have previously been
unin
Slides Practice Questions
Chapter 9: Oligopoly Markets
Example #1
Suppose the inverse demand function for the two firms:
P=50-(Q1+Q2)
Cost functions for the two firms are
C1(Q1)=2Q1
C2(Q2)=2Q2
Suppose firm 1 is leader, and firm 2 is the follower:
What is
Assignment #2 Econ (Due December 4th)
2) For each MC = 2q and AVC = q. Thus MC > AVC for all levels of output. The firm sets p = 2q
or q =
0.5p. Since there are 1000 firms each producing q, market supply equals Q = 500p.
3) I would think not.
Consider the
Question 1
A monopolistic firm faces a market demand curve P = 100 Q and has the total cost function
T C = 60Q
(a) Write out the firms profit function
(b) What is the firms profit maximizing level of output?
(c) What is the monopolists profit at this outp
Question 1
Consider a market with a monopolistic firm and four consumers whose reservation prices are indicated in the following table:
Consumer Index
Reservation Prices
Consumer A
11
Consumer B
9
Consumer C
5
Consumer D
7
The firms total cost function is
Question 1
Consider two different products, X and Y , for product Y with price PY = 3 measured on the vertical
axis and product X with price PX = 60 measured on the horizontal axis, and budget I = 300. A
representative consumers utility function is given
Question 1
If input prices are PK = 1 and PL = 4, and the production function is
Q = 4K 0.5 L0.5 ,
(1)
(a) Drive the functions for marginal products, M PK and M PL
(b) Drive the MRTS, M PK /M PL
(c) Find the optimal value of K and L if the firms target ou
Sample Solution to Question 4 in Assignment 2
Part (c) If the club charges a price greater than marginal cost that maximized the profit based on
weak demand, the clubs profit function will be
= (8
2Qw )Qw
2Qw .
(1)
The associate first-order condition is
ECON 2009 C
Assignment 2
Sol
2015 Fall
Question 1 (10 points)
A firms total cost function is
TC = 200 + 4Q + 2Q2,
(1)
where Q is quantity.
(a) (5 points) If the firm is perfectly competitive and its optimal output is 5, what is the market
price?
(b) (5 po
MANAGERIAL
ECONOMICS:
THEORY, APPLICATIONS, AND CASES
W. Bruce Allen | Neil A. Doherty | Keith Weigelt | Edwin Mansfield
Chapter 11
OLIGOPOLY
OLIGOPOLY: A MARKET WITH A SMALL
NUMBER OF FIRMS
Characterized by interdependence and the need
for managers to e
Chapter 1: Introduction
MULTIPLE CHOICE
1. Managerial economics uses
a. formal models
b. prescribed behavior
c. quantitative methods
d. microeconomic theory
e. all of the above
ANS: E
MSC: Factual
DIF: Easy
to help managers solve problems.
REF: 2
TOP: Int
MANAGERIAL
ECONOMICS:
THEORY, APPLICATIONS, AND CASES
W. Bruce Allen | Neil A. Doherty | Keith Weigelt | Edwin Mansfield
Chapter 2
DEMAND THEORY
OBJECTIVES
Understand the many factors that influence
demand.
Demand elasticity: Measures the percentage cha
MANAGERIAL
ECONOMICS:
THEORY, APPLICATIONS, AND CASES
W. Bruce Allen | Neil A. Doherty | Keith Weigelt | Edwin Mansfield
Chapter 5
PRODUCTION THEORY
PRODUCTION FUNCTION WITH ONE
VARIABLE INPUT
A production function shows the amount
that can be produced (
MANAGERIAL
ECONOMICS:
THEORY, APPLICATIONS, AND CASES
W. Bruce Allen | Neil A. Doherty | Keith Weigelt | Edwin Mansfield
Chapter 3
CONSUMER BEHAVIOR
AND RATIONAL CHOICE
OBJECTIVES
Explain the determination of individual
consumer demand
Explain how manag
MANAGERIAL
ECONOMICS:
THEORY, APPLICATIONS, AND CASES
W. Bruce Allen | Neil A. Doherty | Keith Weigelt | Edwin Mansfield
Chapter 14
RISK ANALYSIS
RISK AND PROBABILITY
Risk: Hazard or chance of loss
Probability: Likelihood or chance that
something will h
MANAGERIAL
ECONOMICS:
THEORY, APPLICATIONS, AND CASES
W. Bruce Allen | Neil A. Doherty | Keith Weigelt | Edwin Mansfield
Chapter 1
INTRODUCTION
OBJECTIVES
1. Provide a guide to making good managerial decisions.
2. Use formal models to analyze the effects
Question 1
A firm sells in two distinct markets, each of which is completely sealed off from the other. The
demand curve from the two markets can be represented as
P1 = 50
Q1
,
2
(1)
P2 = 20
Q2
.
4
(2)
and
The firms total cost function is T C = 100 + 10
Question 1
The market demand and supply are given by
QD = 6500 100P
(1)
QS = 1200P.
(2)
and
Is 5 a sustainable price in this market? If P = 6, is there excess supply or excess demand in the
market? Calculate it.
Question 2
Consider a demand curve:
Q = 10
ECON 2009 B
Assignment 2
2016 Fall
Due Date: Friday in class, November 4, 2016
Q1 (15 points)
Suppose in a monopolistic market, the market demand curve is
P = 80
Q,
(1)
where P is the product price and Q is output. The monopolistic firms total cost functi
Solution to Assignment 2
Question 1
(a) The firms profit function is
= T R T C = (80 Q)Q 40Q.
(1)
(b) Differentiating the firms profit with respect to Q yields
d
= 80 2Q 40 = 0 QM = 20.
dQ
(2)
By plugging QM = 20 into the demand function, we have P M = 8
ECON 2009G
Econ 2009G
Practice problems on government policies
1
ECON 2009G
Multiple Choice
1. The incidence of a tax:
a. indicates how much of the tax burden is borne by the sellers.
b. indicates how much of the tax burden is borne by the buyers.
c. indi
ECON 2009G
Econ 2009G
Practice problems on consumer choice
1
ECON 2009G
Multiple Choice
Note: I indicate the correct answers in blue throughout.
1. Points along an indifference curve represent bundles of goods that
a. cost the same amount to buy
b. consum
ECON 2009G
Econ 2009G
Practice problems on demand and supply
1
ECON 2009G
Multiple Choice
Note: I indicate the correct answers in blue throughout.
1. Information on the quantities that would be purchased at different
prices, holding all other factors cons
ECON 2009G
Econ 2009G
Practice problems on monopoly
1
ECON 2009G
Multiple Choice
1. Significant market power exists in:
a. perfectly competitive markets only
b. oligopoly markets only
c. oligopoly markets and perfectly competitive markets
d. monopoly mark
ECON 2009G
Econ 2009G
Homework Assignment 1
Due: Jan-30
Use a cover sheet; staple your pages together
1
ECON 2009G
Problem 1 (10 points)
Mary spends $25,000 on painting supplies and maintaining her studio every year. She recently declined two job offers f