Problem Set 3
1. Sally’s Sunflowers, Inc. uses fertilizer, labor, and land to produce sunflowers. When the
amount of land and labor is fixed, the relationship between the quantity of fertilizer and the
number of sunflowers grown per m
Problem Set 1
1. A) Suppose that the demand for milk increases because a new beauty treatment is discovered that uses milk. Use diagrams to analyze the effects of this change on the equilibrium for milk and the equilibrium for
Problem Set 3
you would be willing to pay to join the movie club to be
allowed to rent the DVDs at the price given?
1. Suppose that a consumers utility function is U(x,y) =
ln x + ln y. Let PX = 2, PY = 1, and I =10. Calculate the
Problem Set 2
1. Jessica likes apples but doesnt care one way or the
other about pears. If apples and pears are the only two
goods available, draw her indifference curves.
5. Tom spends all of his $100 weekly income on two
goods, X an
Problem Set 2
1. Jessica likes apples but doesnt care one way or the other about pears. If apples and
pears are the only two goods available, draw her indifference curves.
2. Satch likes food but dislikes smoke. The more food he has,
New Material for Final Exam
Notes: From the material on monopoly through the end of the quarter.
Text: Chapter 17 (Skip pp. 604-609)
Real World Examples: (fair game for multiple choice):
1) Multitasking document on Blackboard but only the excerpts from Th
Problem Set 4
First, a few extra problems on the consumer behavior material: 1. Suppose initially that when the price of gasoline is $1 per gallon, you consume 1,000 gallons per year. Then, a couple of things change: 1) The pr
Weve banned laptops and cell phones from class due to the negative externalities they create for students
and me. What you do when not in class is, of course, up to you. However, its probably a good idea to be
aware of some of the findings on information
Last Problem Set!
4. A monopolys price is $20. At this price the
absolute value of the elasticity of demand is 2. What
is the monopolys MC?
1. Suppose that the market demand curve for a
monopoly is given by Q = 100 5P.
A. What is the inverse ma
MMSS 211-1 Practice Final Exam Questions
1. A monopoly is able to practice price
discrimination. The MC of production is constant at
$10 per unit. The demand functions of the two types
of consumers are:
A: Qd = 100 2P, MR = 50-Q
B: Qd = 110 P, MR = 110-2Q
Problem Set 5
price of 100, and if w = 4, how much more will Julia be paid than
the other managers in the industry? (Let Julias salary be given
1. A firms TR curve is given by TR = bQ 3Q2. Is this a
perfectly competitive firm?
It is important that all of the exams are graded in the same way and that no mistakes are
made in the process. It is Gabys job to strive to be certain that the exams are graded
consistently. Youve been provided a grading key showing how the grading was do
1. In many experimental markets, poorly informed, error-prone, and uncomprehending human agents
interact through the trading rules to produce social algorithms which demonstrably approximate the
wealth maximizing outcomes traditionally thought to require
MMSS 211-1 Week of 11-17-2014 Notes
Golden Key 2) The more elastic is demand at a given P, the greater is MR.
Math proof (Woo hoo!):
Three Conditions to Be Profitable:
1) Firm must have some control over price.
2) Market must be sep
MMSS 211-1 Solutions Midterm 1G
Question 6 TB = 1500 - note CS = TB TC -> TB = CS + TC (CS=consumer surplus, TB=total benefit,
Answer must feature two aspects: first, direction of the change in this situation, and second, full
211-1 Week of 11-3-2014 Notes
The MR curve of a PC firm is a horizontal line at P (and so coincides with its demand curve);
i.e., MR = P.
We noted last time that this follows from the fact that TR = P*q for a PC firm, where P is a
211-1 Week of 10-13-2014 Notes
Weve decomposed the total change in B (the total effect) into 1) the change in B due to the
relative price changethe sub effect and 2) the change in B due to the real income changethe
Sub Effect is always ne
211-1 Week of 11-10-2014 Notes
Monopolythe sole producer of a product that has no close substitutes. Reasons monopoly
D curve facing the monopoly is the market demand curve for the product and it slopes
Monopoly has NO S curve. How
MMSS 211-1 Solutions Midterm 2E
Answer must feature three parts: comparison of marginal cost and price, direction of change in
quantity, clear explanation.
At Q=17, MC=72 > P=64, so the firm should decrease the quantity produced. By reducing qu
Practice Exam 1 Questions
6. Which of the following is likely to increase the
equilibrium price of a commodity?
1. A consumer buys food and clothing out of her
income. When her income goes up by 25% and the
prices of food and clothing both go u
Practice Exam 1 Questions, Part II
The following questions can be addressed by either
Eric or Gaby the TA.
1. Suppose that the demand and supply of a given
good are Qd = 60-5P and QS = -10 + 2P. A tax in the
amount of $2 is imposed on consumers
Practice Exam 2 Questions, Part I
1. A PC firm must sell its output at a market price of $2. Its
present operating figures are: AC = $4
MC = $2,TFC = $1,750, Q = 1,000. To earn maximum profit
this firm should
increase the output lev
Last Problem Set!
1. All firms in a competitive industry have LRTC curves given by C = Q 3 10Q2 +50Q, where Q is the level of the firm's output. What will be the industry's LR equilibrium price? What will be the LR equilibrium output le
Sample Final Exam Questions
1. A monopoly finds that at the current output level, MR = $2, AC = $2, and this is the minimum value of AC. To maximize profit, this firm should A. increase price. B. decrease price. C. decrease output and sa
Problem Set 2
1. Auerbach's demand for frozen custard is given by P = 20 2QA while that for Kotlikoff is given by P = 40 2QB. Supposing that these are the only two consumers in this market, what is the market demand for froz
politics science discussion
Medium Voter Theorem
Arrows theorem: no perfect voting theorem (no proof)
Different electoral system pros and cons
Pros: do not fight in each county
Cons: discourage the minority
Case Studies in Deception
For a study on conformity to group norms, Ann Smith constructs a survey designed to measure
attitudes toward a controversial topic. The research proposal she submits describes her study
procedures: She will use as subjects
2000 CENSUS RACE QUESTION
Asked to place in category (one or more):
1. American Indian or Alaskan Native (including Central and South America)
3. Black or African American
4. Hispanic or Latino
5. Native Hawaiian or other Pacific Islander
"lire.wu W1 .n'._.,. 2:77 ._.v a.
Political science and rational choice
WELLIAM H. RIKER
The impulse to study poiitics scientifically is both old and persistent.
Aristotle collected 158 constitutions in order to generalize about events
EXPECTED UTILITY THEORY
Prepared for the Handbook'gf Economic Methodology (].Daois, W.Hands, and
U.Maki, eds. London, Edward Elgar, 1997, p. 342350). Slightly longer version than
the published one.
Expected Utility Theory (EUT) states that