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Econ 2G03/2X03 Lecture Notes,
Profit Maximization: Choosing Both Outputs and Inputs
Chapter 20
Profit-Maximization
Putting Activity Decisions Together
In first-year microeconomics courses, it is customary
to separate optimal output decisions from optimal
ECON 2X03/2G03 Fall 2012
Quiz 2 Thur. Oct. 10
Section 2 1:30pm-2:20pm
1. A firm has the production function y = min cfw_ 15 z1 , 54 z2 . Each unit of the first input
costs the firm $2 and each unit of the second input costs the firm $4. What is the firm'
FINAL EXAM FALL 2005
1) Milan owns a restaurant and works cooking at his restaurant. If he wanted to hire
someone to cook in his restaurant it would cost him $10 an hour. He pays himself $12 an
hour for cooking to distinguish between his earnings in the k
Practice Test 5
Econ 2X03/2G03 Winter 2005
1) A firm in a small town owns the only ski hills for hundreds of miles in any direction. One day the owner
notices that not many students are frequenting his ski hills and it occurs to him that perhaps he should
ECON 2X03/2G03 Fall 2006
Test 1 Fri. Sept. 22
Section 3 1:30pm-2:20pm
1. George has a Frozen Banana Stand (the output is frozen bananas). There are three
inputs: the little buildings from which the frozen bananas are sold, bananas, and labour.
In the shor
ECON 2X03/2G03 Fall 2006
Test 5 Fri. Nov. 24
Section 3 1:30pm-2:20pm
1. Bluth Confectionary Co. has a monopoly in the market for its Mom's Arsenic Flavored
Cough-Drops. They've discovered that they have two types of consumers: thrifty
cheapskates that wil
Practice Test 2
Econ 2X03/2G03 Winter 2005
- As I expect will be the case on all of your tests, each question would have equal weight
for grading. (10 marks)
1) Suppose a firm has the production function y = z11/4z21/4. If the cost of
input one is 9 and t
Practice Test 4
Econ 2X03/2G03 Winter 2005
1)
The competitive market for slicer-dicers has supply and demand
curves that are both linear. Show that the deadweight loss of an excise tax
of x dollars per unit and the deadweight loss of a per-unit subsidy of
2X03 / 2G03 Final Exam Fall 2002
1)
If a firm has a production function with a diminishing marginal rate of technical
MP1 w1
<
substitution and chooses a bundle of inputs such that
(Where MPi is the
MP2 w2
marginal product and wi is the cost of input i.)
McMaster University
Economics 2G03/2X03: Intermediate Microeconomics I
Quiz 1 - Version 2
Instructor: A. Papanastasiou
Student Name:
Student Number:
Fill in your information above and read the following instructions carefully:
1) Only pencils are allowed
McMaster University
Economics 2G03/2X03: Intermediate Microeconomics I
Quiz 1 - Version 3
Instructor: A. Papanastasiou
Student Name:
Student Number:
Fill in your information above and read the following instructions carefully:
1) Only pencils are allowed
ECON 2X03/2G03 Fall 2012
Quiz 1 Thur. Sept. 27
1. Melanie works for her big brother at his lemonade stand. In the short run (which is
one day long), the various ingredients used to make the lemonade are fixed (it's a long
ride into town to buy more suppli
ECON 2X03/2G03 Fall 2012
Quiz 3 Thur. Oct. 24
Section 2 1:30pm-2:20pm
1. A competitive market has 60 firms operating in it. Every firm has the production
1
1
function y = z12 z22 . In the short run, input two is fixed. 30 of the firms have 4 units of
inpu
ECON 2X03/2G03 Winter 2012
Quiz 1 Wed. Jan. 18
Section 7 4:30pm-5:20pm
1. A firm's average variable cost curve is U-shaped. At an output level of 100, its shortrun marginal cost is 25, its short-run average cost is 40, its average product is 10, and its
m
Attempt 1
Written: Dec 1, 2014 3:24 PM - Dec 2, 2014 5:04 PM
Submission View
Released: Dec 2, 2014 8:30 PM
1
2
1 / 1 point
In Wheeling, West Virginia, there are 200 used cars for sale, half of them are good ("peaches") and half
of them are bad ("lemons").
Review Questions - Week 4
Prot Maximization and Cost Minimization in the Long run and in the Short Run
Econ2G03/2X03, Fall 2016
Instructor: A. Papanastasiou
1. A producer is using the production function f (x1 ; x2 ) = minf2x1 ; 3x2 g to produce output y
Week 2 Review Questions
Question 2 - Answer
Part a) The marginal products of input 1 and input 2 are M P1 = c21 and
M P2 = c12 , respectively. Both are positive and constant since c1 and c2 are
positive and constant. As input 1 increases by a small amount
Review Questions - Week 2
Econ2G03/2X03, Fall 2016
Instructor: A. Papanastasiou
1. Consider the Cobb-Douglas production function:
1
1
f (x1 ; x2 ) = 4x13 x23
a) Is it feasible to produce 7 units of output with x1 = 2, x2 = 5? Is it e cient?
b) Is it feasi
Week 4 Review Questions
Answers to question 2
1
a) We have M P1 = 1=2 and M P2 = 1=3: Thus, M P1 =M P2 = 21 = 23 : To
3
see how much of each input the rm will use, compare this number with the
w1
3
1
price ratio w
w2 : If 2 > w2 then the isoquant is steep
Review Questions - Week 1
Econ2G03/2X03, Fall 2016
Instructor: A. Papanastasiou
1. Suppose that market demand for a particular commodity is given by the function: Q(p) = 100
where p is market price.
5p;
a) Does the law of demand hold for this function? Wh
Econ2G03/2X03 -C03 Midterm 1 Sample Questions
Please note that in the offical midterm you will have 50 minutes to finish 30
multiple choice questions.
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1
Midterm Examination I
Winter, 2016
Course number:
Course title:
ECON 2G03/2X03 C03
Intermediate Microeconomics I
/Applied Business Economics
Name of instructor:
Zhen He
Date of exam:
February 4th, 2016
Exam time:
7:00 PM - 7:50 PM
Number of exam pages:
7
Chapter 16
Game Theory and Oligopoly
Oligopoly is a market structure characterized by:
- A few large firms that each have some
market power.
- Products that are homogeneous.
- Firms are price-setters.
- Examples include steel, oil, sugar etc.
Lets c
Chapter 14
Monopoly Practices and
Price Discrimination
Perfect Price Discrimination
All price discrimination schemes share an
underlying strategy to segment the market and
to charge each segment a different price relative
to its cost.
Perfect Price Disc
McMaster University
Economics 2G03/2X03: Intermediate Microeconomics I
Quiz 1 - Version 2
Instructor: A. Papanastasiou
Student Name:
Student Number:
Fill in your information above and read the following instructions carefully:
1) Only pencils are allowed
McMaster University
Economics 2G03/2X03: Intermediate Microeconomics I
Quiz 1 - Version 3
Instructor: A. Papanastasiou
Student Name:
Student Number:
Fill in your information above and read the following instructions carefully:
1) Only pencils are allowed
EXAM
REVIEW
Scenario 1
A monopoly has TC = y2 + 100. It serves 2 markets. Market 1 has
demand p1 = 200 - .5y1 and Market 2 has demand p2 = 240 y2 .
1. What are the firms marginal cost and revenue functions?
2. What will be the price of the good in each ma
CHAPTER ONE: MICROECONOMICS A WORKING METHODOLOGY
Describing the Economy A Resource Endowment Resource endowment: o
All the resources available to an economy o
A listing of everything in an economy that can be used to produce goods
Ex. Amount of water av
CHAPTER SEVEN: PRODUCTION AND COST MANY VARIABLE INPUTS
Isoquants and Input Substitution
Isoquant: curve composed of all the input bundles that produce some fixed quantity of output
Example: o y = (1200z1z2)1/2 o Define an isoquant by fixing y o 120 = (