Economics 114 Development Economics
Homework 1
Summer 2011
Jinmao Xu
4715033
1.
Country
Production
of TV sets
A
B
56
21
Price of TV
sets in local
currency
$14
28
Production
of haircuts
140
15
Price of
haircuts in
local currency
$5
2
GDP in
local
currency
Econ 106 Managerial Economics
Homework 1
Summer 2011
Jinmao Xu
4715033
1. As the oil production went down by 1.21 million barrels per day, and that's a 5%
reduction in the world's supply of crude oil, therefore, as the supply of crude oil went
down, the s
Econ 106 Managerial Economics
Homework 1
Summer 2011
Due date: Fri Aug 12 at the beginning of class.
Homework guidelines can be found at http:/econ.ucsb.edu/~benelli/homework_guidelines.htm
1. As a result of increased tensions in the Middle East, oil prod
Chapter 06 - Making Capital Investment Decisions
Chapter 06 Making Capital Investment Decisions Answer Key
Multiple Choice Questions
1. The changes in a firm's future cash flows that are a direct consequence of accepting a
project are called _ cash flows.
Chapter 07 - Risk Analysis, Real Options, and Capital Budgeting
Chapter 07 Risk Analysis, Real Options, and Capital Budgeting Answer Key
Multiple Choice Questions
1. An analysis of what happens to the estimate of the net present value when you examine a
n
Chapter 04 - Discounted Cash Flow Valuation
Chapter 04 Discounted Cash Flow Valuation Answer Key
Multiple Choice Questions
1. An annuity stream of cash flow payments is a set of:
A. level cash flows occurring each time period for a fixed length of time.
B
Chapter 05 - Net Present Value and Other Investment Rules
Chapter 05 Net Present Value and Other Investment Rules Answer Key
Multiple Choice Questions
1. The difference between the present value of an investment and its cost is the:
A. net present value.
Chapter 08 - Interest Rates and Bond Valuation
Chapter 08 Interest Rates and Bond Valuation Answer Key
Multiple Choice Questions
1. A bond that makes no coupon payments and is initially priced at a deep discount is called a
_ bond.
A. Treasury
B. municipa
Econ 106 Managerial Economics
Chapter Demand Analysis and Optimal Pricing
Suggested key
Practice problems are NOT reflective of all theory/math/material covered.
1. The demand for soda is given by
Qsoda = 10 2Psoda 4Pcrackers + 2M
Soda sells for $1, crack
Natural Monopoly
Natural Monopoly an industry in which
economies of scale are so important that only
one firm can survive.
In other words, it is more efficient for there to
be one firm in the industry.
Example: Gas companies (we wouldnt want
multiple gas
Econ 106 Managerial Economics
Chapter Cost Analysis
Practice problems are NOT reflective of all theory/math/material covered.
1. A firm produces 100 units of good A at a total cost of $1,500 and separately 200 units of
good B at a cost of $2,000. By combi
Economics 114 Development Economics
Homework 2
Jinmao Xu
4715033
Summer 2011
1. Provide the statistics of the country of Lesotho:
a. The total fertility rate is 3.26 births per woman;
b. The total population is 2,066,919;
c. The growth rate of population
Introduction to
Economic Decision
Making
1
Managerial Economics (ME)
Definition
the study of how to direct scarce resources in
the way that most efficiently achieves a
managerial goal.
Not the best definition. Next two slides
provides a more comprehensive
Cost Analysis
1
Costs
Discussion
TC(short run) = VC + FC
TC(short run) = wL + vK
TC(long run) = VC
TC(long run) = wL + vK
2
Properties of Cost Curves
homogeneity of degree 1. If input prices
increase at the same rate, then the cost of
production at any
Monopoly
1
Monopoly
Single monopoly
P
MC
P*
ATC
D
Q*
MR
Q
2
Monopoly
3
Monopoly Multi-Plant Decision
Math example, solution provided in class
P = 100 - 4Q
TC1 = 200 + 2q 2
1
TC1 = 150 + 10q2 + 10q22
4
Monopoly
Short run vs Long run discussion with graph
Econ 106 Managerial Economics
Chapter Production
Suggested key
Practice problems are NOT reflective of all theory/math/material covered.
1. Carefully explain the condition that the firm should follow if it wishes to produce at least
cost in the long run.
Econ 106 Managerial Economics
Chapter Cost Analysis
Suggested key
Practice problems are NOT reflective of all theory/math/material covered.
1. A firm produces 100 units of good A at a total cost of $1,500 and separately 200 units of
good B at a cost of $2
Economics 106
Managerial Economics
Assignment 1
Fall 2010
1. A firm has estimated the following inverse demand function.
P = -0.1Q + 14
or graphically,
P
A
$6
B
$4
80
100
Q
at $4, Q=100
at $6, Q=80
a. The elasticity from A to B is -1.3, meaning that for e
Economics 106
Managerial Economics
Assignment 1
Fall 2010
Due date: Fri, Nov 12 at the beginning of class. Follow the homework guidelines as posted on
the webpage (see http:/econ.ucsb.edu/~benelli/homework_guidelines.htm).
Round all answers to 2 decimals.
The Market for "Lemons": Quality Uncertainty and the Market Mechanism
Author(s): George A. Akerlof
Source: The Quarterly Journal of Economics, Vol. 84, No. 3 (Aug., 1970), pp. 488-500
Published by: Oxford University Press
Stable URL: http:/www.jstor.org/s
Econ 106 Managerial Economics
Homework 1
shangze li
Summer 2011
5160114
(1)the decreasing of Middle East oil production lead a leftward shift in the supply curve for oil,
and thus result in an increase in the equilibrium price of crude oil. Since oil is a
Chapter 1: Answers to Questions and Problems
1.
Consumer-consumer rivalry best illustrates this situation. Here, Levi Strauss &
Co. is a buyer competing against other bidders for the right to obtain the antique
blue jeans.
2.
The maximum you would be will
Chapter 6: Answers to Questions and Problems
2. When a firm requires a limited number of standardized inputs that are sold by many firms in the marketplace, the optimal method of procurement is spot exchange. One advantage of spot exchange is that they pe
Proposed Merger Between Heinz and Beech-Nut Scrutinized
The case is a condensed and slightly modified version of the public copy of the decision in
FTC (Appellant) v. H.J. Heinz Co. and Milnot Holding Corporation that was argued on February 12,
2001 and d
Econ 106
Class notes
Chapter 1. The Fundamentals of Managerial Economics
A. Definition of Topic.
1. Economics
2. Manager
3. Managerial Economics
Definition Managerial Economics: (Vague, very poor generic definition provided by the
textbook). Managerial Ec
Econ 106
Class notes
Chapter 2: Market Forces: Demand and Supply
A. Introduction and Overview.
1. Overview
2. The structure of the supply and demand model.
B. The Demand Side.
1. Motivation: Diminishing marginal utility:
2. Definition of Demand Curve
3. D
Econ 106 Managerial Economics
Chapter Demand Analysis and Optimal Pricing
Suggested key
Practice problems are NOT reflective of all theory/math/material covered.
1. The demand for soda is given by
Qsoda = 10 2Psoda 4Pcrackers + 2M
Soda sells for $1, crack
Econ 106 Managerial Economics
Chapter Oligopoly, Industry Concentration
Suggested key
Practice problems are NOT reflective of all theory/math/material covered.
1. Derive the Lerner index.
See class notes
2. Why is the largest possible value of the Herfind