Instructions for using the Word Test Bank
1. Open the empty test.doc file; then open the chapter file containing the
questions from which youd like to choose.
2. From the chapter file, highlight the first question you want to use ( Note: When
highlighting

Support Class 2.
1. On the same graph, plot the following functions:
(i) y=1+x; (ii) y=2+x; (iii) y=1+2x.
Explain how the graphs of (ii) and (iii) dier from the graph of (i).
2. On the same graph plot the following functions
y
y
=
=
1+x
9 x:
Solve mathema

Support Class 3.
1. Dierentiate the following functions with respect to x :
(i) y = 1+2x
(ii) y=1+2x+3x2
(iii) y=a+bx where a; b are constants
1
(iv) y=1+ x
this time using the product rule
(v) y=x(1+x)
(vi) y=(1+x)(2+x)
1
(vii) y= x (1 + x)
(viii) y=(1+x

Economics for Mathsperts I
1. Suppose demand and supply functions are described by
qd
qs
= a bp
= c + dp
where a; b; c; d > 0 and a > c: Suppose the government imposes a sales tax t > 0.
Find the equilibrium price paid p (t) by consumers. Find dp =dt: How

Mathsperts II. Two Part Pricing.
A monopolist (only one seller) sells a photocopier and supplies toner. There
is one consumer. If the consumer buys the photocopier, he/she then has to buy
the monopolist toner to use it. The consumer demand for toner is q

Mathsperts II. The Extended Cournot Game.
Suppose in the world market for cars, there are two competitors, Volkswagen
and Toyota. Suppose both have the same unit costs of production c and the
world demand for cars is given
p=1
q
where q is total world sal

Mathsperts IV. Trade Unions in a Competitive Product Market. There are n competitive rms where each has cost function 1 c(q ) = 4q + q 2 2 to produce output q: (i) Given market price p; nd the supply function of each rm: q = q s (p) (ii) Suppose demand is

Economics for Mathsperts VI
The following describes the shirking model of unemployment. Suppose each
month an unemployed worker gets a job with probability p while an employed
worker loses his/her job with probability s: Suppose unemployed workers receive

Economics for Mathsperts VII
Consider the same framework as described in Mathsperts VI, but now the
probability an unemployed worker gets a job depends on the eort he/she makes
to nd employment. Each period an active job seeker gets a job with probability

Mathspert VII - Comparative Advantage.
Amy and Bob each have an allotment and grow only two crops: potatoes
and
owers. If Amy allocates fraction of her allotment to growing potatoes,
her yield is 2 potatoes and 1-
owers. If Bob allocates fraction his yi

Mathspert IX.
If a rm hires L workers it produces output Q = F (L) where F (:) is the
rm production function. It faces an upward sloping labour supply curve,
s
L = Ls (w) where the higher the wage paid w; the more the number of workers
who would like a jo

Support Class 1.
Question 1. Note that (a+b)(c+d) can be expanded as ac + ad + bc + bd:
Expand each of the following expressions:
(i) (x+y)2 ; (ii) (x-y)2 (iii) (3x+2y)2 (iv) (1-2z)2 (v) (4p+5q)(4p-5q).
Question 2. Noting that the expression a2 + ab can b

Ec115 Problem Set 7
1. The rm cost of producing output q is C (q ) = 2 + q + 0:5q 2 : Compute MC,
s
AC and show AC is a minimum at q = 2: Suppose further that demand for the
good is given by q d = 37 p:
(i) Suppose the rm is competitive and takes price p

Ec 115 Problem Set 6.
1. Consider the following total cost function C = q 2 + 6q + 16:
(a) Find the average cost (AC) and marginal cost (MC) functions.
(b) For what value of q is AC a minimum (check socs)?
(c) For what values of q is (i) MC below AC and (

Principles of Economics
Part One Introduction
1. Ten Principles of Economics
2. Thinking Like an Economist
3. Interdependence and the Gains from Trade
Part Two Supply and Demand I: How Markets Work
4. The Market Forces of Supply and Demand
5. Elasticity a

EC115 Methods of Economic Analysis
Problem Set 1, Week 3
1.
Find the solution to the following linear equations:
(a) 4 x 8 = 0
1
1
(b) x = 0
3
6
(c) x + 3 = 4 x
Check your answers graphically.
2.
Consider the following implicit linear functions:
(a) 10 x

EC115 Methods of Economic Analysis
Problem Set 1 Solutions 1. Find the solution to the following linear equations:
(a) 4 x - 8 = 0
1 1 (b) - x - = 0 3 6 (c) x + 3 = 4 x Check your answers graphically. Solution: (a) x = 2 Graphically:
y
y = 4x - 8
2
x
Solu

EC115 Methods of Economic Analysis
Problem Set 2, Week 4
1.
Find the solution (if it exists) to the following linear systems:
(a)
y = 2x 3
2y 3x = 4
(a)
x + 1/3y = 10/3
y = -3x + 10
(b)
y = 2x 4
4x = 2y 12
Check your solutions graphically.
2.
Consider the

EC115 Methods of Economic Analysis
Problem Set 2, Week 4 Solutions
1.
Find the solution (if it exists) to the following linear systems:
(a)
y = 2x 3
2y 3x = 4
(b)
x + 1/3y = 10/3
y = -3x + 10
(c)
y = 2x 4
2y 4x = 12
Solution:
(a)
2(2x 3) 3x = 4
4x 6 3x =

Ec 115 - Problem Set 3.
In this problem set you will need to use the following facts, that
(i) the solution to ax2 + bx + c = 0 is given by
p
b
b2 4ac
x=
;
2a
(ii) that a function y = ax2 + bx + c is
(a) a maximum at x = b=2a if a < 0;
(b) a minimum at x

Ec 115 - Problem Set 3 solutions.
1. Consider the function y = x2 4x + 5: For what values of x is y = 0;
i.e. solve for x where
x2 4x + 5 = 0:
Draw the function y = x2 4x + 5 on a graph.
Answer: rewrite this quadratic equation as
x2 + 4x
5=0
and it is cle

Ec115 Problem Set 4. The rules of dierentiation.
1. Find the rst derivates of the following functions:
(i) y = 3 + 2x; y = c + 2x; y = c + 2x + bx2 where b; c are any numbers.
(ii) y = x(1 + x); y = x(1 + 2x2 ); y = (1 + x + 2x2 )(1 3x3 ):
1
(iii) y = x 1

Ec115 Problem Set 4. The rules of dierentiation.
1. Find the rst derivates of the following functions:
dy
(i) y = 3 + 2x ) dx = 2
dy
y = c + 2x ) dx = 2
dy
y = c + 2x + bx2 ) dx = 2 + 2bx.
(ii) Using the product rule:
dy
y = x(1 + x) ) dx = (1 + x) + x(1)

Chapter 3
Prepared by
Simon Lenthen
University of Western
Sydney
In this presentation.
1. define the term sole trader and give the main features of a
sole trader
2. outline the advantages and disadvantages of a sole trader
3. define the term partnership a