ECON 100C
Problem Set 2 Solutions:
Monopoly vs. Perfect Competition & Intro. to Price Discrimination
Prof. Levkoff
Part I. Evaluate the validity of each of the following statements. Be sure to clearly
ECON 100C Midterm Exam 1
Name_
Prof. Levkoff
Seat#_
Fall 2013
PID#_
Version A Solutions
Date_
Directions: You will have the entire lecture to complete the exam after everyone has
been seated and the e
ECON 100C
Prof. Levkoff
Problem Set 1 Solutions
Part I. Evaluate the validity of each of the following statements.
a) Because the invisible hand guides the market equilibrium to an allocation that
max
110A Macroeconomics
Fall 2011
Problem Set 3
(Due: Tuesday Oct. 18th 2011)
Part I: True, False or Uncertain?
Briefly motivate your answer.
1. Money is a liability for the central bank.
2. When the prop
ECON 100C
Prof. Levkoff
Problem Set 6 Solutions:
Oligopoly
Part I. Evaluate the validity of each of the following statements. Be sure to clearly
accompany your explanation using graphs and equations w
Econ 100A
Problem Set1
(Math Review1, Consumer Preference)
1. Find the first and second derivatives for the following functions of x.
(a) f(x) = a+bx+cx2 +dx3 (b) f(x) = ln(4x3)
2. Let z = 4x4y35x2
b) (10 points) Calculate the level of output for each firm to set that would maximize
the joint profit of the firms if they were to merge and attempt to form a cartel
(hint: you should solve a maximiz
3 points correctly finding the profit maximizing total quantity
If students assumed they split the 45 cattle equally to 22.5, that is fine
award full credit.
Suppose now that Anna has a head start on
#3) (35 points) Consider a rival, but nonexcludable common grazing ground that is
accessible to two cattle herders, Anna and Bob. The more grazing ground cattle have
access to, the more they can eat
,
and firm 2 faces demand only for product 2 given by
,
(both from part a). If firm 1s cost is $10 per unit and firm 2s cost is $20 per
unit, compute the Nash equilibrium prices for the firms to charg
SCORING RUBRIC
(FOR TA USE ONLY)
Total Score_/100
Part I Total:_/28
a) _/7
Part II Total:_/72
#1) Total_/16
b) _/7
a)_/7
c) _/7
b)_/9
d) _/7
#2) Total_/21
a)_/7
b)_/7
c)_/7
#3) Total_/35
a)_/7
b)_/7
c
(is rival but nonexcludable), property rights are not clearly defined so
Coase breaks down.
2 points stating the general idea of Coase
7 points for identifying that since property rights are not clea
ECON 100C Final Exam
Name_
Prof. Levkoff
Seat#_
Spring 2014
PID#_
Version A/B Solutions (Friday)
Date_6/13/14_
Directions: You will have the entire three hours to complete the exam after everyone has
0, then
ANSWER: If ,
100
100
and
Case I: exclude low type. Sell only to type 2.
Set p*=10 and extract total consumer surplus be the entry fee (and profit)
of $14016.67.
Case II: sell to both.
First n




/
/
.
#2) (21 points) Consider a monopolist selling two differentiated, but substitutable
products. The (direct) demand for each product is given by
,
100
100
and
,
, where and are nonnegativ
SCORING RUBRIC
(FOR TA USE ONLY)
Total Score_/100
Part I Total:_/30
Part II Total:_/70
a) _/10
#1) Total_/30
b) _/10
a)_/10
c) _/10
b)_/20
#2) Total_/40
a)_/10
b)_/10
c)_/10
d)_/10
9
ECON 100C Final Exam
Name_
Prof. Levkoff
Seat#_
Spring 2014
PID#_
Version A/B Solutions (Wednesday)
Date_
Directions: You will have the entire lecture to complete the exam after everyone has
been seat
Part I. Evaluate the validity of each of the following statements. Be sure to clearly
accompany your explanation using graphs and equations where appropriate. Points
are awarded for the quality / comp
7 points for correctly associating BOS with output setting and MP with price
setting games for the sequential cases
c) (7 points) In this course, weve discussed two notions of efficiency: Pareto effic
d) (7 points) Because the static cartel model predicts a breakdown from the collusive
arrangement in a fashion similar to that of the prisoners dilemma, we should not expect
to see cartels sustained i
2 points by showing that total profits are higher for both in the joint profit
max solution
2 points arguing that both firms have an incentive to deviate from the
cartel
4 points prove this analytical
4 points correctly taking the first order conditions and computing the
profit maximizing price in case II
2 points correctly identifying case I as the profit maximizing solution
#2) (40 points) Consid
ANSWER (Version A):
Step 1 C dominates B. Eliminate B.
Step 2 Y dominates Z. Eliminate Z.
Step 3 C dominates A. Eliminate A.
Step 4 Y dominates W. Eliminate W.
The game is reduced to
Player 1
Player 2
2 points correctly identify different entry fees that correspond to the
consumer surplus of each type
4 points correctly calculate the solution above
b) (20 points) If instead, the monopolist is force
Part I. Evaluate the validity of each of the following statements. Be sure to clearly
accompany your explanation using graphs and equations where appropriate. Points
are awarded for the quality / comp
7 points for correctly associating BOS with output setting and MP with price
setting games for the sequential cases
c) (7 points) Consider an outcome of a (welldefined) Cournot duopoly game from
whic