Assignment 1 Solutions. October 6, 2017
|
|
- Chester Warner
- 5 years ago
- Views:
Transcription
1 Assignment 1 Solutions October 6, 2017
2 All subquestions are worth 2 points, for a total of 76 marks. PLEASE READ THE SOLUTION TO QUESTION 3. Question 1 1. An indifference curve is all combinations of the two consumption goods that the individual is indifferent between. 2. Highly curved: Pencils and paper are complementary. 3. Less curved: Glasses and contacts are fairly substitutable. For some people, perhaps they are complimentary. Maybe they like glasses for the evenings, and contacts for the day. Specific example: = 10Q +5R 2. Slope of the budget constraint is -5/10 = -1/2. The Y-intercept is 50/10 = 5, and the X-intercept is 50/5 = The entire area below and on the budget constraint is affordable. Everything above the budget constraint is not affordable. 4. The slope of the indifference curve is equal the slope of the budget line, at the optimal consumer choice, which is -1/2. 5. The Y-intercept decreased to 50/15. The X-intercept remained the same. 6. The slope of the budget constraint is now -5/15 = - 1/3. This will be the slope of the indifference curve at the optimal choice. 7. The slope of the indifference curve represents how much quinoa the consumer is willing to trade for one unit of rice (in order to remain indifferent). 8. The new budget curve shifts outward. The slope is still -1/3. The new Y and X intercepts are 100/15 and 100/5 respectively. 1
3 Question 2 3. We plot demand curves with price on the vertical axis, and quantity on the horizontal. The vertical axis intercept (where Q=0) is 5, and the horizontal axis intercept (where P=0) is The slope ( P/ Q) is -1/4. 5. Recall our formula for the elasticity at a specific point is Q Q P = 4, then the price elasticity of demand is -4. P P Q. If price is 4, Q =4, and 6. If price is 2, quantity is 12. The slope is the same. Therefore, the elasticity is 2/3 7. I gave everyone full marks on this question, regardless of your answer. Think about an example. If ramen noodles increase from 5 cents to 10 cents ( a 100 percent increase in price), would your demand change much? Probably not. The price is still very low. However, if the price of ramen started at 2 dollars, then increased to 4 dollars (a 100 percent increase), that would substantially affect my demand. For linear demand curves, the elasticity will always increase (in absolute value terms) as the price rises. Of course, linear demand curves are not very realistic. Some highlycurved demand curves will not have the same relationship between price and elasticity. 8. Attention here: Most people in the class said the demand curve will shift rightwards simply because the person has more money. This is not always true. It depends if the good is normal or inferior. Wine is a normal good - demand increases with income. Other things like rice might be inferior - increases in income might cause demand to fall as people substitute towards tastier foods. I gave full marks, regardless of whether you drew this distinction. On the exam, I will not. 9. Beer is typically considered a substitute for wine. If beer becomes more expensive, people will demand more of wine. Demand curve shifts right. Question 3 1. An isoquant represents all combinations of the two inputs that produce the same amount of output. 2. It is hard to say. As long as you justified your answer, you got full marks. If you said perfect complements, you lost half a mark, because it is unrealistic to think that a computer for a firm is useless without a secretary to go with it. 2
4 3. The isoquant representing more output is further out. 4. Attention Here: I made a poor semantic choice. In tutorials, and in the tutorial notes, I defined the cost curve as the line that represents all combinations of inputs that together cost the same amount. In Kevin s slide s, he called this the firm s budget constraint. These were both poor choices. Most textbooks call this the iso-cost line. In firm-side economics, the cost curve sometimes refers to the relationship between total cost and total output. We have not covered this. Nonetheless, some of you used this definition. You only lost minimal marks for doing this, depending on whether the rest of your answer was consistent with this definition. 5. The slope of the cost curve (iso-cost) represents the ratio of the input prices. This is how much of one input can be replaced with the other, while holding total cost constant. If you defined the cost curve differently (as described above), then the slope would be the marginal cost of output. We have not covered this. 6. The slope of the isoquant represents the rate at which the two inputs can be substituted without changing output. Now the specific example: 1. The Y-intercept (robots) is 2000/100 = 20. The X-intercept (workers) is 2000/200 = The slope is -200/100 = -2. This is the ratio of the input prices. 3. For a given total cost, the Y-intercept represents the number of robots the firm would use if it didn t use any workers. Similarly for the X-intercept. 4. The slope of the isoquant at the optimal input choice will be the same as the slope of the cost curve (iso-cost) = The new cost curve (iso-cost) shifts inwards. The slope has not changed. The new Y and X-intercepts are 1000/10 and 1000/20 respectively. 3
5 Question 4 3. The supply curve starts at (Q= 500, P=0), then continues upwards. The slope is (1/100). 4. Quantity supplied is Price elasticity of supply is Q P = = 1/2. P Q Higher wages mean higher production costs. This shifts the supply curve to the left. 6. If production costs decrease, the supply curve shifts right. Question 5 3. To find the equilibrium price and quantity, set quantity demanded equal to quantity supplied P = P, and solve for P = 4. At a price of four, quantity is 300. To check your algebra, you can plug 4 into both the supply and demand equations. The result should be the same. 4. Using the same formula as always, the price elasticity of demand is -1/3, and the price elasticity of supply is 2/3. 5. The new price is 2, and quantity The new elasticity of demand is -1/4. You got full marks, regardless of if you explained why it changed. See the explanation in question 2. 4
Chapter 3. Consumer Behavior
Chapter 3 Consumer Behavior Question: Mary goes to the movies eight times a month and seldom goes to a bar. Tom goes to the movies once a month and goes to a bar fifteen times a month. What determine consumers
More informationa. Find the price elasticity of demand (4 points) b. Based on your calculation above, is demand elastic, inelastic, or unit elastic?
Econ 3144 Spring 2002 Name Test 2 Rupp Essay Questions (25 points) & 25 Multiple Choice Questions (75 points) Note the following formula maybe helpful in this exam: E P = (P/Q) * (1/slope). 1. The market
More informationEconomics 101 Fall 2010 Homework #3 Due 10/26/10
Economics 101 Fall 2010 Homework #3 Due 10/26/10 Directions: The homework will be collected in a box before the lecture. Please place your name, TA name and section number on top of the homework (legibly).
More informationTopic 4b Competitive consumer
Competitive consumer About your economic situation, do you see the light at the end of the tunnel? I think the light at the end of the tunnel has been turned off due to my budget constraints. 1 of 25 The
More informationEcon 323 Microeconomic Theory. Practice Exam 1 with Solutions
Econ 323 Microeconomic Theory Practice Exam 1 with Solutions Chapter 2, Question 1 The equilibrium price in a market is the price where: a. supply equals demand b. no surpluses or shortages result c. no
More informationEcon 323 Microeconomic Theory. Chapter 2, Question 1
Econ 323 Microeconomic Theory Practice Exam 1 with Solutions Chapter 2, Question 1 The equilibrium price in a market is the price where: a. supply equals demand b. no surpluses or shortages result c. no
More informationMicroeconomics. The Theory of Consumer Choice. N. Gregory Mankiw. Premium PowerPoint Slides by Ron Cronovich update C H A P T E R
C H A P T E R 21 The Theory of Consumer Choice Microeconomics P R I N C I P L E S O F N. Gregory Mankiw Premium PowerPoint Slides by Ron Cronovich 2010 South-Western, a part of Cengage Learning, all rights
More informationc U 2 U 1 Econ 310 Practice Questions: Chaps. 4, 7-8 Figure 4.1 Other goods
Econ 310 Practice Questions: Chaps. 4, 7-8 Figure 4.1 Other goods A H a c U 2 b U 1 0 x Z H Z 1. Figure 4.1 shows the effect of a decrease in the price of good x. The substitution effect is indicated by
More informationnot to be republished NCERT Chapter 2 Consumer Behaviour 2.1 THE CONSUMER S BUDGET
Chapter 2 Theory y of Consumer Behaviour In this chapter, we will study the behaviour of an individual consumer in a market for final goods. The consumer has to decide on how much of each of the different
More informationPBAF 516 YA Prof. Mark Long Practice Midterm Questions
PBAF 516 YA Prof. Mark Long Practice Midterm Questions Note: these 10 questions were drawn from questions that I have given in prior years (in a similar class). These questions should not be considered
More information2. Find the equilibrium price and quantity in this market.
1 Supply and Demand Consider the following supply and demand functions for Ramen noodles. The variables are de ned in the table below. Constant values are given for the last 2 variables. Variable Meaning
More informationProfessor Bee Roberts. Economics 302 Practice Exam. Part I: Multiple Choice (14 questions)
Fall 1999 Economics 302 Practice Exam Professor Bee Roberts Part I: Multiple Choice (14 questions) 1. The law of demand (quantity demanded increases as price decreases) is always fulfilled for a normal
More informationFalse_ The average revenue of a firm can be increasing in the firm s output.
LECTURE 12: SPECIAL COST FUNCTIONS AND PROFIT MAXIMIZATION ANSWERS AND SOLUTIONS True/False Questions False_ If the isoquants of a production function exhibit diminishing MRTS, then the input choice that
More informationEconomics 101 Spring 2001 Section 4 - Hallam Exam 3A-Blue
Economics 101 Spring 2001 Section 4 - Hallam Exam 3A-Blue 1. Marginal physical product measures a. the change in cost required to produce one more unit of output. b. the change in output that can be obtained
More informationECO402 Microeconomics Spring 2009 Marks: 20
Microeconomics Marks: 20 NOTE: READ AND STRICTLY FOLLOW ALL THESE INSTRUCTIONS BEFORE ATTEMPTING THE QUIZ. INSTRUCTIONS This quiz covers Lesson # 01-10. Do not use red color in your quiz. It is used only
More information1. Madison has $10 to spend on beer and pizza. Beer costs $1 per bottle and pizza costs $2 a slice.
Econ 3144 Fall 2001 Name Test 2 Rupp Essay Questions (50 points) & 25 Multiple Choice Questions (50 points) Note the following formula maybe helpful in this exam: E P = (P/Q) * (1/slope). 1. Madison has
More information~ In 20X7, a loaf of bread costs $1.50 and a flask of wine costs $6.00. A consumer with $120 buys 40 loaves of bread and 10 flasks of wine.
Microeconomics, budget line, final exam practice problems (The attached PDF file has better formatting.) *Question 1.1: Slope of Budget Line ~ In 20X7, a loaf of bread costs $1.50 and a flask of wine costs
More informationIntroduction to economics for PhD Students of The Institute of Physical Chemistry, PAS Lecture 3 Consumer s choice
Introduction to economics for PhD Students of The Institute of Physical Chemistry, PAS Lecture 3 Consumer s choice Dr hab. Gabriela Grotkowska, University of Warsaw Based on: Mankiw G., Taylor R, Economics,
More informationPOSSIBILITIES, PREFERENCES, AND CHOICES
Chapt er 9 POSSIBILITIES, PREFERENCES, AND CHOICES Key Concepts Consumption Possibilities The budget line shows the limits to a household s consumption. Figure 9.1 graphs a budget line. Consumption points
More informationIntermediate Macroeconomics: Economics 301 Exam 1. October 4, 2012 B. Daniel
October 4, 2012 B. Daniel Intermediate Macroeconomics: Economics 301 Exam 1 Name Answer all of the following questions. Each is worth 25 points. Label all axes, initial values and all values after shocks.
More informationIntro to Economic analysis
Intro to Economic analysis Alberto Bisin - NYU 1 The Consumer Problem Consider an agent choosing her consumption of goods 1 and 2 for a given budget. This is the workhorse of microeconomic theory. (Notice
More informationProblem Set 2. PART I Multiple Choice Figure 1. The figure illustrates the market for roses in a country.
PART I Multiple Choice Figure 1 Problem Set 2 The figure illustrates the market for roses in a country. 1. Refer to Figure 1. The amount of revenue collected by the government from the tariff is a. $200.
More informationNote 1: Indifference Curves, Budget Lines, and Demand Curves
Note 1: Indifference Curves, Budget Lines, and Demand Curves Jeff Hicks September 19, 2017 Vancouver School of Economics, University of British Columbia In this note, I show how indifference curves and
More information1. What is the vertical intercept of the demand curve above? a. 120 b. 5 c. 24 d. 60 e. 1/5
Econ 3144 Fall 010 Name Test Dr. Rupp I have neither given nor received aid on this exam (signature) The following formula might be useful: E p = (P/Q)*(1/slope) 40 Multiple Choice Questions Use the following
More informationWe want to solve for the optimal bundle (a combination of goods) that a rational consumer will purchase.
Chapter 3 page1 Chapter 3 page2 The budget constraint and the Feasible set What causes changes in the Budget constraint? Consumer Preferences The utility function Lagrange Multipliers Indifference Curves
More informationSuggested Solutions to Assignment 3
ECON 1010C Principles of Macroeconomics Instructor: Sharif F. Khan Department of Economics Atkinson College York University Summer 2005 Suggested Solutions to Assignment 3 Part A Multiple-Choice Questions
More informationThe supply function is Q S (P)=. 10 points
MID-TERM I ECON500, :00 (WHITE) October, Name: E-mail: @uiuc.edu All questions must be answered on this test form! For each question you must show your work and (or) provide a clear argument. All graphs
More informationFoundational Preliminaries: Answers to Within-Chapter-Exercises
C H A P T E R 0 Foundational Preliminaries: Answers to Within-Chapter-Exercises 0A Answers for Section A: Graphical Preliminaries Exercise 0A.1 Consider the set [0,1) which includes the point 0, all the
More information2c Tax Incidence : General Equilibrium
2c Tax Incidence : General Equilibrium Partial equilibrium tax incidence misses out on a lot of important aspects of economic activity. Among those aspects : markets are interrelated, so that prices of
More informationSign Pledge I have neither given nor received aid on this exam
Econ 3144 Spring 2007 Test 1 Dr. Rupp Name Multiple Choice Questions (2 points each) 1. True/False: A price ceiling can cause a surplus. A. True B. False Sign Pledge I have neither given nor received aid
More informationChapter 10 3/19/2018. AGGREGATE SUPPLY AND AGGREGATE DEMAND (Part 1) Objectives. Aggregate Supply
Chapter 10 AGGREGATE SUPPLY AND AGGREGATE DEMAND (Part 1) Objectives Explain what determines aggregate supply in the long run and in the short run Explain what determines aggregate demand Explain how real
More information8 POSSIBILITIES, PREFERENCES, AND CHOICES. Chapter. Key Concepts. The Budget Line
Chapter 8 POSSIBILITIES, PREFERENCES, AND CHOICES Key Concepts FIGURE 8. The Budget Line Consumption Possibilities The budget shows the limits to a household s consumption. Figure 8. graphs a budget ;
More informationEcn Intermediate Microeconomic Theory University of California - Davis November 13, 2008 Professor John Parman. Midterm 2
Ecn 100 - Intermediate Microeconomic Theory University of California - Davis November 13, 2008 Professor John Parman Midterm 2 You have until 6pm to complete the exam, be certain to use your time wisely.
More informationTheory of Consumer Behavior First, we need to define the agents' goals and limitations (if any) in their ability to achieve those goals.
Theory of Consumer Behavior First, we need to define the agents' goals and limitations (if any) in their ability to achieve those goals. We will deal with a particular set of assumptions, but we can modify
More informationLINES AND SLOPES. Required concepts for the courses : Micro economic analysis, Managerial economy.
LINES AND SLOPES Summary 1. Elements of a line equation... 1 2. How to obtain a straight line equation... 2 3. Microeconomic applications... 3 3.1. Demand curve... 3 3.2. Elasticity problems... 7 4. Exercises...
More informationDO NOT BEGIN WORKING UNTIL YOU ARE TOLD TO DO SO. READ THESE INSTRUCTIONS FIRST.
Midterm Exam #2; Page 1 of 10 Economics 101 Professor Wallace Midterm #2, Version #1 November 16 th, 2005. DO NOT BEGIN WORKING UNTIL YOU ARE TOLD TO DO SO. READ THESE INSTRUCTIONS FIRST. You have 75 minutes
More informationIntroduction. The Theory of Consumer Choice. In this chapter, look for the answers to these questions:
21 The Theory of Consumer Choice P R I N C I P L E S O F ECONOMICS FOURTH EDITION N. GREGORY MANKIW Premium PowerPoint Slides by Ron Cronovich 2008 update 2008 South-Western, a part of Cengage Learning,
More informationPossibilities, Preferences, and Choices
9 Possibilities, Preferences, and Choices Learning Objectives Household s budget line and show how it changes when prices or income change Use indifference curves to map preferences and explain the principle
More informationLECTURE NOTES ON MICROECONOMICS
LECTURE NOTES ON MICROECONOMICS ANALYZING MARKETS WITH BASIC CALCULUS William M. Boal Part 4: General equilibrium and market power Chapter 13: General equilibrium Problems (13.1) [Efficiency versus fairness]
More informationChapter 4. Consumer and Firm Behavior: The Work- Leisure Decision and Profit Maximization. Copyright 2014 Pearson Education, Inc.
Chapter 4 Consumer and Firm Behavior: The Work- Leisure Decision and Profit Maximization Copyright Chapter 4 Topics Behavior of the representative consumer Behavior of the representative firm 1-2 Representative
More informationProblem Set 5 Answers. A grocery shop is owned by Mr. Moore and has the following statement of revenues and costs:
1. Ch 7, Problem 7.2 Problem Set 5 Answers A grocery shop is owned by Mr. Moore and has the following statement of revenues and costs: Revenues $250,000 Supplies $25,000 Electricity $6,000 Employee salaries
More informationUniversity of Toronto June 22, 2004 ECO 100Y L0201 INTRODUCTION TO ECONOMICS. Midterm Test #1
Department of Economics Prof. Gustavo Indart University of Toronto June 22, 2004 SOLUTIONS ECO 100Y L0201 INTRODUCTION TO ECONOMICS Midterm Test #1 LAST NAME FIRST NAME STUDENT NUMBER INSTRUCTIONS: 1.
More informationMICROECONOMICS - CLUTCH CH CONSUMER CHOICE AND BEHAVIORAL ECONOMICS
!! www.clutchprep.com CONCEPT: BUDGET CONSTRAINT A budget constraint shows the limitations on what you can Income The amount of money available to spend Choose between various combinations of goods that
More informationProfessor Christina Romer SUGGESTED ANSWERS TO PROBLEM SET 5
Economics 2 Spring 2017 Professor Christina Romer Professor David Romer SUGGESTED ANSWERS TO PROBLEM SET 5 1. The tool we use to analyze the determination of the normal real interest rate and normal investment
More informationECON 221: PRACTICE EXAM 2
ECON 221: PRACTICE EXAM 2 Answer all of the following questions. Use the following information to answer the questions below. Labor Q TC TVC AC AVC MC 0 0 100 0 -- -- 1 10 110 10 11 1 2 25 120 20 4.8.8
More informationSOLUTIONS. ECO 100Y L0201 INTRODUCTION TO ECONOMICS Midterm Test # 1 LAST NAME FIRST NAME STUDENT NUMBER. University of Toronto June 22, 2006
Department of Economics Prof. Gustavo Indart University of Toronto June 22, 2006 SOLUTIONS ECO 100Y L0201 INTRODUCTION TO ECONOMICS Midterm Test # 1 LAST NAME FIRST NAME STUDENT NUMBER INSTRUCTIONS: 1.
More informationSuggested Solutions to Problem Set 3
Econ154b Spring 2005 Suggested Solutions to Problem Set 3 Question 1 (a) S d Y C d G Y 3600 2000r 0.1Y 1200 0.9Y 4800 2000r 600 2000r (b) To graph the desired saving and desired investment curves, remember
More informationMidterm 2 - Solutions
Ecn 00 - Intermediate Microeconomic Theory University of California - Davis February 7, 009 Instructor: John Parman Midterm - Solutions You have until 3pm to complete the exam, be certain to use your time
More informationChapter 11: Cost Minimisation and the Demand for Factors
Chapter 11: Cost Minimisation and the Demand for Factors 11.1: Introduction We assume a very simple objective for firms namely, that they want to maximise profits 1. We will explore the implications of
More informationIntroductory to Microeconomic Theory [08/29/12] Karen Tsai
Introductory to Microeconomic Theory [08/29/12] Karen Tsai What is microeconomics? Study of: Choice behavior of individual agents Key assumption: agents have well-defined objectives and limited resources
More informationThe Theory of Consumer Choice. UAPP693 Economics in the Public & Nonprofit Sectors Steven W. Peuquet, Ph.D.
The Theory of Consumer Choice UAPP693 Economics in the Public & Nonprofit Sectors Steven W. Peuquet, Ph.D. 1 These slides are for use only as part of a formal instructional course and may not be copied,
More informationECONOMICS SOLUTION BOOK 2ND PUC. Unit 2
ECONOMICS SOLUTION BOOK N PUC Unit I. Choose the correct answer (each question carries mark). Utility is a) Objective b) Subjective c) Both a & b d) None of the above. The shape of an indifference curve
More information1. What is the vertical intercept of the demand curve above? a. 20 b. 6 c. 120 d. 60 e. 1/6
Econ 3144 Spring 2010 Name Test 2 Dr. Rupp I have neither given nor received aid on this exam (signature) The following formula might be useful: E p = (P/Q)*(1/slope) 40 Multiple Choice Questions Use the
More informationEcn Intermediate Microeconomics University of California - Davis July 7, 2010 Instructor: John Parman. Midterm - Solutions
Ecn 100 - Intermediate Microeconomics University of California - Davis July 7, 2010 Instructor: John Parman Midterm - Solutions You have until 3:50pm to complete this exam. Be certain to put your name,
More informationMathematical Economics dr Wioletta Nowak. Lecture 1
Mathematical Economics dr Wioletta Nowak Lecture 1 Syllabus Mathematical Theory of Demand Utility Maximization Problem Expenditure Minimization Problem Mathematical Theory of Production Profit Maximization
More informationTheoretical Tools of Public Finance. 131 Undergraduate Public Economics Emmanuel Saez UC Berkeley
Theoretical Tools of Public Finance 131 Undergraduate Public Economics Emmanuel Saez UC Berkeley 1 THEORETICAL AND EMPIRICAL TOOLS Theoretical tools: The set of tools designed to understand the mechanics
More informationDo Not Write Below Question Maximum Possible Points Score Total Points = 100
University of Toronto Department of Economics ECO 204 Summer 2012 Ajaz Hussain TEST 2 SOLUTIONS TIME: 1 HOUR AND 50 MINUTES YOU CANNOT LEAVE THE EXAM ROOM DURING THE LAST 10 MINUTES OF THE TEST. PLEASE
More informationChapter 19: Compensating and Equivalent Variations
Chapter 19: Compensating and Equivalent Variations 19.1: Introduction This chapter is interesting and important. It also helps to answer a question you may well have been asking ever since we studied quasi-linear
More information1. Consider the figure with the following two budget constraints, BC1 and BC2.
Short Questions 1. Consider the figure with the following two budget constraints, BC1 and BC2. Consider next the following possibilities: A. Price of X increases and income of the consumer also increases.
More informationElements of Economic Analysis II Lecture II: Production Function and Profit Maximization
Elements of Economic Analysis II Lecture II: Production Function and Profit Maximization Kai Hao Yang 09/26/2017 1 Production Function Just as consumer theory uses utility function a function that assign
More informationEXAMINATION #2 VERSION A Consumers and Demand October 1, 2015
Signature: William M. Boal Printed name: EXAMINATION #2 VERSION A Consumers and Demand October 1, 2015 INSTRUCTIONS: This exam is closed-book, closed-notes. Calculators, mobile phones, and wireless devices
More informationWhat is the marginal utility of the third chocolate bar to this consumer? a) 10 b) 9 c) 8 d) 7
Chapter 5 Review Quiz 1. Which of the following best expresses the law of diminishing marginal utility? a) the more a person consumes of a product, the smaller becomes the utility received from its consumption
More informationNAME: INTERMEDIATE MICROECONOMIC THEORY FALL 2006 ECONOMICS 300/012 Midterm II November 9, 2006
NAME: INTERMEDIATE MICROECONOMIC THEORY FALL 2006 ECONOMICS 300/012 Section I: Multiple Choice (4 points each) Identify the choice that best completes the statement or answers the question. 1. The marginal
More informationPRACTICE QUESTIONS CHAPTER 5
CECN 104 PRACTICE QUESTIONS CHAPTER 5 1. Marginal utility is the: A. sensitivity of consumer purchases of a good to changes in the price of that good. B. change in total utility realized by consuming one
More informationMicroeconomics Pre-sessional September Sotiris Georganas Economics Department City University London
Microeconomics Pre-sessional September 2016 Sotiris Georganas Economics Department City University London Organisation of the Microeconomics Pre-sessional o Introduction 10:00-10:30 o Demand and Supply
More informationLecture 5: Individual and Market Demand
Lecture 5: Individual and Market Demand September 29, 2015 Overview Course Administration Change in Income and Changes in Consumption Figuring Out Your Demand Curve Income and Substitution Effects Individual
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Exam Name Exercises CH 5 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A perfectly price elastic demand curve will be a line. 1) A) positively
More informationThis appendix discusses two extensions of the cost concepts developed in Chapter 10.
CHAPTER 10 APPENDIX MATHEMATICAL EXTENSIONS OF THE THEORY OF COSTS This appendix discusses two extensions of the cost concepts developed in Chapter 10. The Relationship Between Long-Run and Short-Run Cost
More informationEconomics. The Theory of Consumer Choice 11/8/2012. Introduction. Principles of. The budget constraint. Answers
/8/22 N. Gregory Mankiw Principles of Economics Sixth Edition 2 The Theory of onsumer hoice Modified by Joseph Tao-yi Wang Premium PowerPoint Slides by Ron ronovich In this chapter, look for the answers
More information1 Supply and Demand. 1.1 Demand. Price. Quantity. These notes essentially correspond to chapter 2 of the text.
These notes essentially correspond to chapter 2 of the text. 1 Supply and emand The rst model we will discuss is supply and demand. It is the most fundamental model used in economics, and is generally
More informationYork University. Suggested Solutions
York University Atkinson Faculty of Liberal and professional Studies Department of Economics ECON1010C Term Test 2 July 20, 2005 Instructor: Sharif F. Khan Suggested Solutions PART A 1. B 2. A 3. D 4.
More informationEconomics II - Exercise Session # 3, October 8, Suggested Solution
Economics II - Exercise Session # 3, October 8, 2008 - Suggested Solution Problem 1: Assume a person has a utility function U = XY, and money income of $10,000, facing an initial price of X of $10 and
More informationL K Y Marginal Product of Labor (MPl) Labor Productivity (Y/L)
Economics 102 Summer 2017 Answers to Homework #4 Due 6/19/17 Directions: The homework will be collected in a box before the lecture. Please place your name, TA name and section number on top of the homework
More informationMidterm #1 Exam Study Questions AK AK AK Selected problems
Midterm #1 Exam Study Questions AK AK AK Selected problems Practice Short Answer for Microeconomic Concepts A subset of these questions will be on the exam. 1. What is the Ceteris Paribus assumption? 2.
More informationEcon 301 Summer 2003 Asinski
Econ 301 Summer 2003 Asinski roblem Set 1 Suggested solutions 1. roblem 4. S (after freeze) a S (before freeze) * b * Initial equilibrium in the market for frozen juice id determined by intersection of
More informationSummer 2016 ECN 303 Problem Set #1
Summer 2016 ECN 303 Problem Set #1 Due at the beginning of class on Monday, May 23. Give complete answers and show your work. The assignment will be graded on a credit/no credit basis. In order to receive
More informationChapter 4 Topics. Behavior of the representative consumer Behavior of the representative firm Pearson Education, Inc.
Chapter 4 Topics Behavior of the representative consumer Behavior of the representative firm 1-1 Representative Consumer Consumer s preferences over consumption and leisure as represented by indifference
More informationEco 300 Intermediate Micro
Eco 300 Intermediate Micro Instructor: Amalia Jerison Office Hours: T 12:00-1:00, Th 12:00-1:00, and by appointment BA 127A, aj4575@albany.edu A. Jerison (BA 127A) Eco 300 Spring 2010 1 / 27 Review of
More informationMidterm 1 - Solutions
Ecn 100 - Intermediate Microeconomic Theory University of California - Davis October 16, 2009 Instructor: John Parman Midterm 1 - Solutions You have until 11:50am to complete this exam. Be certain to put
More informationEcn Intermediate Microeconomic Theory University of California - Davis October 16, 2008 Professor John Parman. Midterm 1
Ecn 100 - Intermediate Microeconomic Theory University of California - Davis October 16, 2008 Professor John Parman Midterm 1 You have until 6pm to complete the exam, be certain to use your time wisely.
More informationECO101 PRINCIPLES OF MICROECONOMICS Notes. Consumer Behaviour. U tility fro m c o n s u m in g B ig M a c s
ECO101 PRINCIPLES OF MICROECONOMICS Notes Consumer Behaviour Overview The aim of this chapter is to analyse the behaviour of rational consumers when consuming goods and services, to explain how they may
More informationECO 2013: Macroeconomics Valencia Community College
ECO 2013: Macroeconomics Valencia Community College Exam 3 Fall 2008 1. The most important determinant of consumer spending is: A. the level of household debt. B. consumer expectations. C. the stock of
More information3. After you have completed the exam, sign the Honor Code statement below.
Heather Krull Midterm 2 Solution Econ190 March 31, 2006 Name: Instructions: 1. Write your name above. 2. Write your answers in the space provided. If you attach additional sheets of paper, be sure to indicate
More informationPractice Problem Solutions for Exam 1
p. 1 of 17 ractice roblem olutions for Exam 1 1. Use a supply and demand diagram to analyze each of the following scenarios. Explain briefly. Be sure to show how both the equilibrium price and quantity
More informationEconomics 386-A1. Practice Assignment 3. S Landon Fall 2003
Economics 386-A1 Practice Assignment 3 S Landon Fall 003 This assignment will not be graded. Answers will be made available on the Economics 386 web page: http://www.arts.ualberta.ca/~econweb/landon/e38603.html.
More informationGame Theory and Economics Prof. Dr. Debarshi Das Department of Humanities and Social Sciences Indian Institute of Technology, Guwahati
Game Theory and Economics Prof. Dr. Debarshi Das Department of Humanities and Social Sciences Indian Institute of Technology, Guwahati Module No. # 03 Illustrations of Nash Equilibrium Lecture No. # 02
More informationSummer 2016 Microeconomics 2 ECON1201. Nicole Liu Z
Summer 2016 Microeconomics 2 ECON1201 Nicole Liu Z3463730 BUDGET CONSTAINT THE BUDGET CONSTRAINT Consumption Bundle (x 1, x 2 ): A list of two numbers that tells us how much the consumer is choosing of
More informationFile: Ch02, Chapter 2: Supply and Demand Analysis. Multiple Choice
File: Ch02, Chapter 2: Supply and Demand Analysis Multiple Choice 1. A relationship that shows the quantity of goods that consumers are willing to buy at different prices is the a) elasticity b) market
More informationEconomics 102 Homework #7 Due: December 7 th at the beginning of class
Economics 102 Homework #7 Due: December 7 th at the beginning of class Complete all of the problems. Please do not write your answers on this sheet. Show all of your work. 1. The economy starts in long
More information제 4 장소비자행동이론. The Theory of Consumer Behavior
제 4 장소비자행동이론 The Theory of Consumer Behavior 소비자행동 Consumer Behavior Consumer Preferences 소비자선호 The goods and services consumers actually consume. Given the choice between 2 bundles of goods a consumer
More informationFinal Exam. Figure 1
ECONOMICS 10-008 Final Exam Dr. John Stewart December 11, 2001 Instructions: Mark the letter for your chosen answer for each question on the computer readable answer sheet using a No.2 pencil. Note a)=1,
More informationProfessor Christina Romer SUGGESTED ANSWERS TO PROBLEM SET 5
Economics 2 Spring 2016 Professor Christina Romer Professor David Romer SUGGESTED ANSWERS TO PROBLEM SET 5 1. The left-hand diagram below shows the situation when there is a negotiated real wage,, that
More informationYORK UNIVERSITY. Suggested Solutions to Part C (C3(d) and C4)
Page 1 of 5 Pages YORK UNIVERSITY Atkinson College Department of Economics ECON 2450 - Midterm Examination July 13, 2006 Suggested Solutions to Part C (C3(d) and C4) C3 (d). Derive and graph an equation
More informationEcon 1101 Practice Questions about Consumer Theory Solution
Econ 0 Practice Questions about Consumer Theory Solution Question : Sam eats only green eggs and ham. He has an income of $3. Green eggs have a price of P G = $ and ham has a price of P H = $. Sam s preferences
More informationThis is Toolkit, chapter 31 from the book Theory and Applications of Economics (index.html) (v. 1.0).
This is Toolkit, chapter 31 from the book Theory and Applications of Economics (index.html) (v. 1.0). This book is licensed under a Creative Commons by-nc-sa 3.0 (http://creativecommons.org/licenses/by-nc-sa/
More informationConsumer Choice and Demand
Consumer Choice and Demand CHAPTER12 C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to 1 Calculate and graph a budget line that shows the limits to
More informationLecture 8: Producer Behavior
Lecture 8: Producer Behavior October 23, 2018 Overview Course Administration Basics of Production Production in the Short Run Production in the Long Run The Firm s Problem: Cost Minimization Returns to
More informationECON 310 Fall 2005 Final Exam - Version A. Multiple Choice: (circle the letter of the best response; 3 points each) and x
ECON 30 Fall 005 Final Exam - Version A Name: Multiple Choice: (circle the letter of the best response; 3 points each) Mo has monotonic preferences for x and x Which of the changes described below could
More informationThe Ricardian Model. Rafael López-Monti Department of Economics George Washington University Summer 2015 (Econ 6280.
SURVEY OF INTERNATIONAL ECONOMICS The Ricardian Model Rafael López-Monti Department of Economics George Washington University rlopezmonti@gwu.edu Summer 2015 (Econ 6280.20) Required Reading: Feenstra,
More informationProblem Set 4 - Answers. Specific Factors Models
Page 1 of 5 1. In the Extreme Specific Factors Model, a. What does a country s excess demand curve look like? The PPF in the Extreme Specific Factors Model is just a point in goods space (X,Y space). Excess
More information