EC 203.3
Fall 2014
Deniz Selman
Bo
gazii University
Quiz 3 Solution
Thursday 6 November 2014
Consider an economy with 2 goods and prices given by p1 = 1 and p2 = 1: A consumer with
income m = 10 has the utility function
u (x) =
1
:
1 + ln (x1 ) + 3x2
Find
FALL 2010
EC 203
Aye Mumcu
Boazii University
PROBLEM SET 6
1) Tijens preferences over gambles in which the probability of events 1 and 2 are both 0.5
can be represented by the Von Neumann-Morgenstein utility function
.
+ .
where is her consumption if e
FALL 2010
EC 203
Aye Mumcu
Boazii University
PROBLEM SET 7
1)
In a 2 person-2 good Exchange economy, both consumers have quasilinear functions,
linear in good 2. If quantities of good 1 are measured horizontally and quantities of good 2 are
measured verti
FALL 2010
EC 203
Aye Mumcu
Boazii University
PROBLEM SET 2
1) Zeyneps utility function is mincfw_x, 5y+z. The price of x is 1, the price of y is 10, and
the price of z is 3. Zeyneps income is 27. How many units of x does Zeynep demand?
2) Mehmet consumes
FALL 2010
EC 203
Aye Mumcu
Boazii University
PROBLEM SET 10
1)
A firm has fixed costs of $1000. Its short run production function is = 9/ , where
x is the amount of variable factor it uses. The price of the variable factor is $4000 per unit.
Where y is th
EC 203.01 and 0.3
FALL 2010PS 11
1. A competitive firm has the short-run cost function c(y) = y32y 2 +5y +6.
Write down equations for:
(a) The firms average variable cost function.
(b) The firms marginal cost function.
(c) At what level of output is avera
FALL 2010
EC 203
Aye Mumcu
Boazii University
PROBLEM SET 3
1) A consumer has the utility function , = and an income of $24. Initially the
price of good 1 is $1 and the price of good 2 is $2. Then the price of good 2 increases to
$3 and the price of good 1
FALL 2010
EC 203
Aye Mumcu
Boazii University
PROBLEM SET 9
1)
A competitive firm produces output using three fixed factors and one variable factor.
The firms short run production function is = 305 2 , where x is the amount of
variable factor used. The p
FALL 2010
EC 203
Aye Mumcu
Boazii University
PROBLEM SET 5
1) Ahmet has utility function , = min, where are his consumption periods 1 and
2, respectively. He earns $147 in period 1 and he will earn $105 in period 2. He can borrow or
lend at an interest ra
FALL 2010
EC 203
Aye Mumcu
Boazii University
PROBLEM SET 1
1) Professor Kriakopf gives 3 midterms. She drops the lowest and gives each student his/her
average score on the other exams. Rana is taking her course and has a 60 her first exam. Let
X2 be her s
FALL 2010
EC 203
Aye Mumcu
Boazii University
PROBLEM SET 4
1) Zeyneps utility function is mincfw_x, 5y. The price of x is 1, the price of y is 10.
Zeyneps initial endowment consists of 10 units of x and 5 units of y. Find Zeyneps net
demand for x and net
FALL 2010
EC 203
Aye Mumcu
Boazii University
PROBLEM SET 8
1)
Draw the isoquants for the following production functions
a. , = 2 +
b. , = min cfw_,
c. , = +
d. , =
e. , = min cfw_2, +
2)
Explain why the following production function has the property
FALL 2010
EC 203
Aye Mumcu
Boazii University
PROBLEM SET 6
(additional questions)
1) A small economy has only two consumers, Pitogoras and Socrates. Pitogorasutility
function is , = + 12 / . Socrates utility function is , = 3 + . Given
that Pitogoras is e
EC 203.02
Problem Set 2
Deadline: 6/8/2016 (Saturday) 13:00
Rules
You can submit your problem set in groups consisting of maximum 2 students. Individual submissions are
also allowed and encouraged. To submit your problem sets, you can either turn in your
EC 203.3
Fall 2014
Deniz Selman
Bo
gazii University
Quiz 5 Solution
Thursday 11 December 2014
While discussing the revealed preferences proof of the Law of Input Demand and Output
Supply, we argue that because inputs xa and output y a = f (xa ) maximizes
EC 203.2
Fall 2014
Deniz Selman
Bo
gazii University
Quiz 3 Solution
Thursday 6 November 2014
Consider an economy with 3 goods and prices given by p1 = 1; p2 = 1 and p3 = 1: A consumer
with income m = 10 has the utility function
u (x) = x21 + x2 + x3 :
Fin
EC 203.2
Fall 2014
Deniz Selman
Bo
gazii University
Quiz 4 Solution
Thursday 27 November 2014
Consider an economy with two goods (good 1 and good 2) and two consumers (Ms. A and
Mr. B). For Ms. A, goods 1 and 2 are perfect complements. For Mr. B, goods 1
EC 203.2
Fall 2014
Deniz Selman
Bo
gazii University
Quiz 5 Solution
Tuesday 9 December 2014
Consider an exchange economy with two goods and two consumers (Ms. A and Mr. B).
Endowments are given by ! A = (10; 0) and ! B = (0; 10) ; and utility functions ar
EC 203.3
Fall 2014
Deniz Selman
Bo
gazii University
Quiz 4 Solution
Thursday 4 December 2014
Consider an economy with two goods (good 1 and good 2) and two consumers (Ms. A and
Mr. B). For Ms. A, goods 1 and 2 are perfect complements. For Mr. B, goods 1 a
EC 203.2
Fall 2014
Deniz Selman
Bo
gazii University
Quiz 6 Solution
Thursday 18 December 2014
A rm has cost function given by
C (y) =
1. What is the rms sunk cost, C (0)?
8
>
< 4
>
:
if y = 0
y 2 + 20
if y > 0
Soln: The rms sunk cost is simply C (0) = 4:
EC 203.2
Fall 2014
Deniz Selman
Bo
gazii University
Quiz 2 Solution
Thursday 30 October 2014
Consider a consumer in an economy with n = 2 goods. Prices are given by p1 = 20 and p2 = 25:
The consumers utility function is given by
u (x) = ln (x1 ) +
x2
:
5
EC 203.3
Fall 2014
Deniz Selman
Bo
gazii University
Quiz 6 Solution
Thursday 18 December 2014
A competitive rm has cost function given by
8
>
< 4
C (y) =
>
: 2
y + 20
if y = 0
if y > 0
Do your best to draw a graph of the rms supply function, y (p). Label
EC 203.2
Fall 2014
Deniz Selman
Bo
gazii University
Quiz 1 Solution
Tuesday 14 October 2014
Consider a consumer in an economy with n = 2 goods. The consumer has income m = 100:
Prices are given by p1 = 20 and p2 = 25:
1. Suppose goods 1 and 2 are perfect
EC 203.3
Fall 2014
Deniz Selman
Bo
gazii University
Quiz 2 Solution
Thursday 30 October 2014
Consider a consumer in an economy with n = 2 goods. Prices are given by p1 = 20 and p2 = 25:
The consumers utility function is given by
u (x) = min fx1 ; x2 g :
S
EC 203.3
Fall 2014
Deniz Selman
Bo
gazii University
Quiz 1 Solution
Thursday 16 October 2014
Consider a consumer in an economy with n = 2 goods. The consumer has income m = 100:
Prices are given by p1 = 20 and p2 = 25: The consumers utility function is gi