Econ 30010
Intermediate Microeconomic Theory
Homework #2 Answers Corrected 4/1/2014
1. As plant manager for your firm you are currently spending $400,000 to produce 600
units of your firm's product. Of this total cost, labor costs are $300,000 and total c
1
DO NOT OPEN THIS TEST BOOKLET UNTIL YOU ARE
INSTRUCTED TO BEGIN
Econ 30010
Intermediate Microeconomic Theory
Midterm Exam, Spring 2013
Instructions:
1) You may use a pen or pencil, a hand-held nonprogrammable, non-graphing calculator, and a
ruler or str
Econ 30010
Intermediate Microeconomic Theory
Homework #1 Answers
1. Suppose consumers have one of two types of preferences for bananas and chocolate.
All type 1 consumers have preferences described by the utility function
U1 ( B, C ) 2 C B
and all type 2
Econ 30010
Intermediate Microeconomic Theory
Answers to Homework Assignment #3 50 points
1. A monopolist serves a market in which the demand function is Q 1000 .05 p and the
monopolist's total cost function is TC (Q ) 2,000,000 20Q 7Q 2 . All of the fixed
1
DO NOT OPEN THIS TEST BOOKLET UNTIL YOU ARE
INSTRUCTED TO BEGIN
Econ 30010
Intermediate Microeconomic Theory
Answers to Midterm 1, Spring 2014
Instructions:
1) You may use a pen or pencil, a hand-held nonprogrammable, non-graphing calculator, and a
rule
Econ 30010
Intermediate Microeconomic Theory
Homework #2 Answers
1. A firm has been operating with the production function f ( L, M ) L1/2 M 1/2 L M
where L denotes units of labor and M denotes units of materials. As a result of changes
in the quality of
1
DO NOT OPEN THIS TEST BOOKLET UNTIL YOU ARE
INSTRUCTED TO BEGIN
Econ 30010
Intermediate Microeconomic Theory
Midterm 2 Exam, Fall 2013
Instructions:
1) You may use a pen or pencil, a hand-held nonprogrammable, non-graphing calculator, and a
ruler or str
1
DO NOT OPEN THIS TEST BOOKLET UNTIL YOU ARE
INSTRUCTED TO BEGIN
Econ 30010
Intermediate Microeconomic Theory
Exam 2, Spring 2014
Instructions:
1) You may use a pen or pencil, a hand-held nonprogrammable, non-graphing calculator, and a
ruler or straighte
Name: _Answer Key_
Econ 30010: Intermediate Microeconomic Theory
Fall 2013
Risk Quiz 14 points
1. Define the concept of a certainty equivalent.
The certainty equivalent of a lottery is the guaranteed outcome whose utility is equal to the
expected utility
Econ 30010
Intermediate Microeconomic Theory
Answers to Chapter 3 Problems
15. U ( x, y ) 3x y
a. Since the marginal utilities are strictly positive, the "more is better" condition is
satisfied. For this utility function, when the consumer receives an add
Econ 30010
Intermediate Microeconomic Theory
Answers to Chapter 4 Problems
5. When a utility function contains the min operator, the marginal utility with respect to each
good is not defined at bundles for which the goods are consumed in the "ideal" propo
Econ 30010
Intermediate Microeconomic Theory
Answers to Additional Cost Problems
Production Functions to be used in the following problems.
A. q = 50 L1/4 K1/5
B. q = KL+L2
C. q = 75LK
D. q = 30L1/3 K2/3
E. q = 4L + 3K
1. Cost Minimization
Find the cost m
Econ 30010
Intermediate Microeconomic Theory
Homework #1 Answer Key
1. Consider an economy with two types of consumers and two products. All type A
consumers have preferences described by the utility function
U A ( q1 , q2 ) q13q2
and all type B consumers
1
DO NOT OPEN THIS TEST BOOKLET UNTIL YOU ARE
INSTRUCTED TO BEGIN
Econ 30010
Intermediate Microeconomic Theory
Midterm 1 Exam, Fall 2013
Instructions:
1) You may use a pen or pencil, a hand-held nonprogrammable, non-graphing calculator, and a
ruler or str
Econ 30010
Intermediate Microeconomic Theory
Answers to Chapter 5 Problems
9. In all 4 graphs, the black budget line is the initial budget line and the initial utility-maximizing
bundle is bundle A. The blue budget line reflects an increase in the price o
Econ 30010
Intermediate Microeconomic Theory
Answers for Chapter 12 Problem
14. a. Under third-degree price discrimination, the firm simultaneously (not independently)
solves for an optimal quantity and price in each market. That is, it equates marginal r
Econ 30010
Intermediate Microeconomic Theory
Additional Monopoly Problems
1) Suppose a monopolist faces market demand described by P = 18000 - 1000Q where P is the
price the monopolist charges to all of its customers and Q is the quantity demanded. Suppos
Econ 30010
Intermediate Microeconomic Analysis
Chapters 1 and 2 Important Concepts and Terms
Positive analysis Analysis that attempts to describe how people and institutions make choices.
Normative analysis Analysis that focuses on how people and institut
Econ 30010
Intermediate Microeconomic Theory
Oligopoly Summary and Outline
An oligopoly is a market served by a small number of firms. With a limited
number of competitors, each firm enjoys some market power which gives it the ability to
influence price a
Econ 30010
Intermediate Microeconomic Theory
Math Review
The basic math skills used in this class include graphing, algebra, and differentiation of
univariate and multivariate functions. This assignment is designed to check your algebra and
differentiatio
Econ 30010
Intermediate Microeconomic Theory
Math Review Answers
Algebra
The answers use the method of linear combination because this method tends to be easier for
many of the problems that will arise in this course. The method of substitution is equally
Econ 30010
Intermediate Microeconomic Theory
Homework #1
If you use more than one piece of paper,
please make sure you staple the pages together.
Code of Honor rules for all homework assignments: You may work on this
assignment with other students in the
Econ 30010
Intermediate Microeconomic Analysis
Competition Exercise1
In this exercise, you will compete in teams of two. You are welcome to choose your partner in advance,
just make sure you are sitting together. Each team is a potential customer and a po
NAME:_
Econ 30010
Intermediate Microeconomic Analysis
Competition Experiment Worksheet
Code of Honor Rules for this assignment: You may not work on this assignment with other
people. You may ask me questions. You must write up your final answers by yourse
Econ 30010
Intermediate Microeconomic Theory
Homework #1
If you use more than one piece of paper,
please make sure you staple the pages together.
Code of Honor rules for all homework assignments: You may work on this
assignment with other students in the
Econ 30010
Intermediate Microeconomic Theory
Answers to Chapter 7 Problems
4. The marginal value of labor is 1000/10 or 100 gallons from an extra dollar spent on labor.
The marginal value of fermentation capacity is 200/.25 = 800 gallons from an extra dol
Econ 30010
Intermediate Microeconomic Theory
Answers for Chapter 12 Problem
14. a. Under third-degree price discrimination, the firm simultaneously (not independently)
solves for an optimal quantity and price in each market. That is, it equates marginal r
Econ 30010
Intermediate Microeconomic Theory
Answers to Additional Monopoly Problems
1) For this problem, MR(Q) = 18000 - 2000Q and MC(Q) = 3Q2. Profit is maximized at
the output level that solves 18000 - 2000Q = 3Q2. Using the quadratic formula, we get
Q
Econ 30100
Intermediate Microeconomic Theory
Answers to Additional Consumer Choice Problems
1. A consumer's utility over bundles consisting of goods 1 and 2 is U (q1 , q2 ) 4 q1 q2 .
a. For this utility function, derive the formula for each marginal utili
Econ 30010
Intermediate Microeconomic Theory
Monopoly Summary and Outline
In a monopoly there is, by definition, only one firm. In the absence of regulation,
this means that a monopolist need only take account of costs and market demand
information in set