A football team has the chance of scoring the game-winning touchdown on the last play of the
game. It can either run or pass. The defense can play for the run or play for the pass. The
following normal form lists the payoffs from the game made up by th
ECON 323: 501
Homework 1 (Chapter 2)
1. Indifference curves for economic goods
a. are nonintersecting.
b. are contour lines of a utility function.
c. are negatively sloped.
d. All of the above.
2. If bundle A lies on an indifference cur
Econ 323(501) - Exam 1
Normative economic analysis
a. involves the study of what comprises a normal firm.
b. involves how resources are actually used in an economy.
c. involves judgments on how resources should be used in an economy.
d. is usually thou
6E:104 Microeconomic Theory
Suggested Solutions for Problem Set 1
1. (1) Applying the two optimality conditions,
F + 2C = 12,
M RSF,C =
= F = 2C + 2.
Using the two equations,
F = 7, C =
(2) Now, the two
In the very short run
a. new firms may enter the industry.
b. existing firms may change the quantity they are supplying.
c. price and quantity supplied is absolutely fixed.
d. quantity supplied is absolutely fixed
If a 1 percent increase in price le
Chapter 13 Top Ten List:
1. What is meant by market power? What does the elasticity of demand for a good
have to do with the potential for a firm to exercise market power over its sales?
Market power is an imperfectly competitive firms ability to raise pr