ECON 203, Spring 2008
Mid-Term Examination #2
You have 55 minutes to answer the questions on this examination. The Exam is out of a total of 30
points. You do not have the right to any aid or device other than pens, pencils, a ruler and an eraser.
Good lu
ECON 203 SPRING 2011
Intermediate Microeconomics.
Midterm 2
Thursday March 24th, 2011 50 Minutes.
VERSION A
PART 2: LONG-ANSWER QUESTION (32 marks)
Choose 1 question (only the first choice will be graded) of the two questions provided below.
Question 2-1
ECON 203 SPRING 2011
Intermediate Microeconomics.
Midterm 1
Wednesday Feb 16th, 2011 50 Minutes.
This midterm consists of two parts. Part 1 contains 5 multiple choice questions that is worth 2
mark each. Part 2 has two short-answer questions that are wort
Chapter 13 Introduction to
Game Theory.
Goals:
+ Set Up a Game.
+ Solve a Game:
Dominant Strategy Equilibrium.
Nash Equilibrium.
Sub-game Perfect Nash Equilibrium.
Describing the Game.
Elements of a game:
The players
Timing of a game: Simultaneous or S
Chapter 13a - Oligopoly
Goals:
1. Cournot: compete on quantity simultaneously.
2. Bertrand: compete on price simultaneously.
3. Stackelberg: compete on quantity in a sequential
setting
4. Hotelling (differentiated products)
Brief Introduction of Game Theo
Chapter 12 - Monopoly
Goals:
1. The sources of monopoly power
2. The monopolists problem
3. Seeking more surplus
Part 1: Price Discrimination
Part 2: Bundling Goods.
Sources of Monopoly Power.
Exclusive control over crucial inputs.
Economies of scale wit
Chapter 11 Perfect Competition
Goal:
+ How do firms in the perfectly competitive
market choose quantity?
+ The short run and long run dynamic of the
perfect competition market equilibrium.
+ Welfare properties of the perfect
competition market equilibrium
Chapter 10 Costs.
Goals:
+ Understand various concepts of costs.
+ Distinguish between short run and long run
cost.
General Concept.
Fixed Cost: the cost that does not vary
with the level of output in the short run.
FC = rK0
Variable Cost: the cost that
Chapter 9: Production.
Goal:
* Production Function The relationship
between input and output.
+ Isoquant.
+ Average Product, Marginal Product.
Short run Production Function and the idea
of Diminishing Return.
Long run Production Function and the idea
of
Chapter 4 Individual and
Market Demand.
Goals:
Generate an individual consumers demand curve.
* Substitution and Income Effect of a Change
in Price.
* How a change in Income affects the demand
curve.
Generate the market demand curve from (many)
individu
Chapter 3 Rational Consumer
Choice.
Overview: In this chapter we will cover the following
topics:
1. The Budget Constraint.
2. The Utility Function.
3. The Optimal Bundle.
Budget Constraint.
A budget constraint, aka feasible set, is a set
of all bundles t
Summer 2012 Econ 245
Week #
(1)
May 14-18
Monday
14
(2)
May 21-25
21
Victoria
Day
(3)
May 28June 1
28
(4)
June 4-8
4
(5)
11
Tuesday
15
FIRST DAY OF
CLASS
Wednesday Thursday
17
16
No Class
22
Lab #1
23
Lab #2
24
29
30
Midterm
31
Lab #3
Taught by Fan
(6)
Ju
MATH MODULE
10
Solutions to
Exercises
1. (a) dy/dx = 3, and d2y/dx2 = 0. This positively sloped straight line has no nite maxima or minima, since dy/dx > 0 everywhere.
(b) dy/dx = 2x + 20, and d2y/dx2 = 2 > 0 everywhere. Setting dy/dx = 0, this function
h
MATH MODULE
9
Solutions to
Exercises
1. Under option (a), you would owe Louie 1000(1.02)364 = $1,350,400.29, whereas
under option (b) you would owe him only 1000(1.1)52 = $142,042.93. The weekly rate
is much more of a bargain!
2. We need to solve the equa
MATH MODULE
8
Solutions to
Exercises
1. (a) 1/36; (b) 36; (c) a/2; (d) 1/144; (e) 243a5; (f) 81a5; (g) 4; (h) 1/2; (i) 2; (j) 1; (k) 8;
(l) 1.682; (m) 3.106.
2. (a) [The pairs of numbers in each case have the log value rst, followed by the ln
value.] (i)
MATH MODULE
7
Solutions to
Exercises
1. Average price = 24 = 0.4(12) + 0.6x, where x is the average price of the remaining 60%
of the goods. Hence x = (24 4.80)/0.6 = 19.2/0.6 = $32/unit.
2. Average price = 24 = 0.6(12) + 0.4x, where x is the average pric
MATH MODULE
6
Solutions to
Exercises
1. Both methods, the = P /(mQ) point-slope technique and the = OF/AF segmentratio technique, should of course have given you the same results. The reason for
doing them both ways is to convince yourself of that fact, a
MATH MODULE
5
Solutions to
Exercises
1. The following Table contains the Total Revenue, Average Revenue, and Marginal
Revenue equations and gives the value for each of the equations when Q = 10 tonnes:
CASE
a
Total Revenue
TR =P Q ($)
($)
30Q Q2 = 200
2
A
MATH MODULE
4
Solutions to
Exercises
1. (a) TR = P QD = $36/kg 24 kg = $864 in each period.
(b) (i) P = 6000 100QD
(ii) P = 6000 0.1QD
(iii) P = 6 0.0001QD
(iv) P = 6 0.1QD
(v) P = 60/2.2 1/[(2.2) 2]QD = 27.2727 0.2066 QD
(c) This one is in the trick ques
MATH MODULE
3
Solutions to
Exercises
[Except for the answers to questions 7 and 8, the solutions below are not accompanied
by graphs. As an exercise, you may want to construct graphs for some of the cases in
questions 1-3, and particularly for questions 5
MATH MODULE
2
Solutions to
Exercises
1. Equations (a), (d), and (e) all have the form y = 12 + 3x, and horizontal intercept
(4, 0). Equations (b), (c), and (f) all have the form y = 12 3x, and horizontal intercept
(4, 0). Equation (g) has the form y = 12
MATH MODULE
1
Solutions to
Exercises
1. You may wish to insert values for x, solve for y, and graph some of the following
equations. If any posed difculties, you should denitely graph them.
(a) y = f(x) = 20/x is a nonlinear function of x whose domain is
MATH MODULE
10
Calculus Results
for the
Non-Calculus Speaker
1. Discussion
1.1 THE BASICS
For some, Calculus (with a capital letter) has an aura of mystery, and can contribute to
math anxiety. Yet if we stand back from it a bit, calculus (in the two-varia
MATH MODULE
9
Growth Rates,
Interest Rates,
and Inflation:
The Economics of Time
1. Discussion
Time is at the core of economics. Economic activity occurs in time, takes time, and costs
time. A production process, such as the conversion of inputs of iron o
MATH MODULE
8
Some Special
Functions
and Formulas
1. Discussion
This module contains refresher notes on several mathematical topics with important
economic applications. Section 1.1 covers:
1. the use of exponents or powers;
2. logarithms and exponential
MATH MODULE
7
Proportions, Weights,
and Percentages
1. Discussion
This Module deals with material which you likely rst encountered in elementary
school, but which still contains enough tricky aspects that it is one of the principal
sources of slips and ca
MATH MODULE
6
Elasticities
1. Discussion
Elasticity measures play a number of important roles in economics. In the text you will
nd a wide range of applications of the elasticity concept in many forms, the most
important of which are listed below in this
MATH MODULE
5
Total, Average, and
Marginal Functions
1. Discussion
A very important skill for economists is the ability to relate total, average, and marginal curves. Much of standard microeconomics involves comparisons at the margin, for
the purpose of m
MATH MODULE
4
Using Economic
Units
1. Discussion
[You will likely nd this Module to be either one of the most obvious wastes of time of
them all or one of the more useful ones. Skim it, and if everything in it is obvious, then
move straight on to the next
MATH MODULE
3
Solving Linear
Equation Systems
1. Discussion
In Module 2, you reviewed the properties of linear equations and functions. One of the
principal uses of such functions is to describe an aspect of economic reality, for example the quantity of a