Homework4 Microeconomics (LESE209)
Due date: December 10th
1. Consider two firms facing the demand curve P = 50 5Q, where Q = Q 1 + Q2.
The firms cost functions are C1(Q1) = 20 + 10Q1 and C2(Q2) = 10 + 12Q2.
a. Suppose both firms have entered th
Chapter 9: The Analysis of Competitive Markets
THE ANALYSIS OF COMPETITIVE MARKETS
1. What is meant by deadweight loss?
Why does a price ceiling usually result in a
Deadweight loss refers to the benefits lost to
Chapter 8: Profit Maximization and Competitive Supply
PROFIT MAXIMIZATION AND COMPETITIVE SUPPLY
1. Why would a firm that incurs losses choose to produce rather than shut down?
Losses occur when revenues do not cover total costs
Chapter 15: Investment, Time and Capital Markets
INVESTMENT, TIME, AND CAPITAL MARKETS
1. A firm uses cloth and labor to produce shirts in a factory that it bought for $10 million.
Which of its factor inputs are measured as flo
Chapter 14: Markets for Factor Inputs
MARKETS FOR FACTOR INPUTS
1. Why is a firms demand for labor curve more inelastic when the firm has monopoly
power in the output market than when the firm is producing competitively?
Chapter 16: General Equilibrium and Economic Efficiency
INFORMATION, MARKET FAILURE,
AND THE ROLE OF GOVERNMENT
GENERAL EQUILIBRIUM AND ECONOMIC EFFICIENCY
QUESTIONS FOR REVIEW
1. Why can feedback effects make a general equilibrium anal
Homework3 Microeconomics (LESE209)
Due date: November 20th
1. Suppose the market for widgets can be described by the following equations:
Demand: P = 10 Q
Supply: P = Q 4
where P is the price in dollars per unit and Q is the quantity in thousand
Answer key : Homework1 Microeconomics (LESE209)
1. Suppose the demand curve for a product is given by Q = 300 - 2P + 4I, where I is average
income measured in thousands of dollars. The supply curve is Q = 3P - 50.
a. If I = 25, find the market clearing pr
Homework #2 Microeconomics (LESE209)
Due date: October 20th
a. Orange juice and apple juice are known to be perfect substitutes. Draw the appropriate priceconsumption curve (for a variable price of orange juice) and income consumption curve.
Chapter 10: Market Power: Monopoly and Monopsony
MARKET STRUCTURE AND COMPETITVE STRATEGY
MARKET POWER: MONOPOLY AND MONOPSONY
1. A monopolist is producing at a point at which marginal cost exceeds marginal revenue.