Economics 3070-004
Spring 2011
(Due Mar 19th in class)
Problem Set 3
1. Suppose that the production function for Prada shoes is given by Q = KL2 - L3 , where Q is the number of Prada shoes produced per year, K is the machine-hours of capital, and L is the
Economics 3070
Problem Set 2 Chapter 2 Problems
1. Ch 2, Problem 2.1
The demand for beer in Japan is given by the following equation: Qd = 700 2P
PN + 0.1I, where P is the price of beer, PN is the price of nuts, and I is average
consumer income.
a. What
Econ 3070
Prof. Barham
Problem Set- Chapter 2 Solutions
1. Ch 2, Problem 2.1
The demand for beer in Japan is given by the following equation: Q d = 700
2P P N + 0.1I, where P is the price of beer, P N is the price of nuts, and I is
average consumer incom
Econ 3070
Prof. Barham
Problem Set Chapter 3 & 4 Questions
1. Graph a typical indifference curve for the following utility functions and determine
whether they obey the assumption of diminishing MRS. To do this first pay attention to
the form of the utili
=
AL2/3 K 3/4
)
=
=
A
A
L2/3 K 3/4
>
Q
Q
=
50KL
M PK
=
50L
2
KL3
3
>
0
50L
>
2
KL3
3
150
2L2
>
K
Q
A( L)2/3 (
A
17/12
50L
3/4
Q
=
M RT SL,K
=
=
=
M PL
M PK
Q
=
=
2/3 3/4
L2/3 K 3/4
17/12 2/3 3/4
L K
1 2 3
K L
3
2
KL3
3
1 2 1/4
K L
2
M PL
M PK
1 2
3/4
8K L
Midterm 1 Solutions Fall 2014
September 26, 2014
1. Law of demand exception: Rice for poor Chinese farmers. If price goes down,
farmers may be able to aord alternative sources of food so the quantity demanded actually decreases.
Law of supply exception: T
Practice Exam 1 solutions
September 19, 2014
1. Comparative statics is the analysis used to examine how a change in one exogenous variable
will aect a system. This is dicult because usually multiple things are changing. For example,
if a school district t
Econ 3070 Practice Midterm #2
1. Prove the following production function exhibits increasing returns to scale.
2. Given the production function , over what range of capital is total output increasing and
over what range will total output be decreasing?
3.
ECON 3070 Brief Calculus Review
September 19, 2014
The power rule is the main rule to be concerned about. Here is the formula:
d n
x = nxn1
dx
In words, when taking the derivative of a variable that has an exponent, multiply the term by
the exponent, and
ECON 3070 Practice Midterm #1
1. What does comparative statics mean? Give an example of why comparative statics are
difficult to perform in the real world.
2. Prove that the following demand curve has a constant elasticity:
3. What does an indifference cu
Name:_
Midterm 1 Fall 2014
Answer all questions. Round all numerical answers to the nearest hundredth.
1. Give a real life example of when the law of demand OR the law of supply might not hold
(2-3 sentences). 3 points.
2. Given the following inverse dema
Economics 3070
Prof. Barham
Problem Set Chapter 1 Questions
(Due Jan. 21st in class)
1. Ch 1, Problem 1.2
Suppose the U.S. market for corn is competitive, with an upward-sloping supply curve
and a downward-sloping demand curve. For each of the following s