Mikro

A competitive firm produces output using three fixed
factors and one variable factor. The firm's short-run
production function is q = 305x − 2x2, where x is
the amount of variable factor used. The price of the
output is $2 per unit and the price of the variable
factor is $10 per unit. In the short run, how many
units of x should the firm use?

An industry has 100 firms. These firms have identical
production functions. In the short run, each
firm has fixed costs of $200. There are two variable
factors in the short run and output is given by
y = (min{x1, 4x2})1/2. The cost of factor 1 is $5 per
unit and the cost of factor 2 is $5 per unit. In the
short run, the industry supply curve is given by

Charlie has a utility function U(xA, xB) = xAxB,
the price of apples is $1, and the price of bananas is
$2. If Charlie's income were $200, how many units
of bananas would he consume if he chose the bundle
that maximized his utility subject to his budget constraint?

The inverse demand function for grapes is described
by the equation p = 518 − 5q, where p is the price
in dollars per crate and q is the number of crates of
grapes demanded per week. When p = $38 per crate,
what is the price elasticity of demand for grapes?

An orange grower has discovered a process for producing
oranges that requires two inputs. The production
function is Q = min{2x1, x2}, where x1 and x2
are the amounts of inputs 1 and 2 that he uses. The
prices of these two inputs are w1 = $5 and w2 = $10,
respectively. The minimum cost of producing 160
units is therefore

The conclusion that the indifference curves representing
distinct levels of preference cannot cross follows
from the assumption of

Miss Muffet insists on consuming 2 units of whey
per 1 unit of curds. If the price of curds is $5 and
the price of whey is $6, then if Miss Muffet's income
is m, her demand for curds will be

Harley's current wealth is $600, but there is a .25
probability that he will lose $100. Harley is risk neutral.
He has an opportunity to buy insurance that
would restore his $100 if he lost it.

The following relationship must hold between the
average total cost (ATC) curve and the marginal
cost curve (MC):

The income elasticity of demand is equal to the

Ike's utility function is U(x, y) = 25xy. He has 12
units of good x and 8 units of good y. Ben's utility
function for the same two goods is U(x, y) = 4x+4y.
Ben has 9 units of x and 13 units of y.

Edmund must pay $6 each for punk rock video cassettes,
V . If Edmund is paid $24 per sack for accepting
garbage, G, and if his relatives send him an
allowance of $96, then his budget line is described
by the equation

If a firm moves from one point on a production
isoquant to another point on the same isoquant,
which of the following will certainly not happen?

According to the first theorem of welfare economics:

Goods 1 and 2 are perfect complements and a consumer
always consumes them in the ratio of 2 units
of good 2 to 1 unit of good 1. If a consumer has an
income of $300 and if the price of good 2 changes
from $5 to $6, while the price of good 1 stays at $1,
then the income effect of the price change

In Gas Pump, South Dakota, every Buick owner's
demand for gasoline is 20 − 5p for p less than or
equal to 4 and 0 for p > 4. Every Dodge owner's
demand is 15 − 3p for p less than or equal to 5 and
0 for p > 5. Suppose that Gas Pump has 100 Buick
owners and 100 Dodge owners. If the price of gasoline
is $4,50, what is the total amount of gasoline
demanded in Gas Pump?

A monopolist has decreasing average costs as output
increases. If the monopolist sets price equal to
average cost, it will

Bella's budget line for x and y depends on all of the
following except

The short run market supply curve in a competitive
market

A firm has the long-run cost function C(q) = 3q2 +
27. In the long run, it will supply a positive amount
of output, so long as the price is greater than

A monopoly has the demand curve q = 10, 000 −
100p. Its total cost function is c(q) = 1, 000 + 10q.
The government plans to tax the monopoly's profits
at a rate of 50%. If it does so, the monopoly will

If there are only two goods, if more of good 1 is always
preferred to less, and if less of good 2 is always
preferred to more, then indifference curves

Suppose that in Enigma, Ohio, klutzes have a productivity
of $1,000 and kandos have a productivity
of $5,000 per month. You can't tell klutzes from
kandos by looking at them or asking them, and it
is too expensive to monitor individual productivity.
Kandos, however, have more patience than klutzes.
Listening to an hour of dull lectures is as bad as losing
$250 for a klutz and $100 for a kando. There
will be a separating equilibrium in which anybody
who attends a course of H hours of lectures is paid
$5,000 per month and anybody who does not is paid
$1,000 per month

The production function is given by f(x) = 4x1/2. If
the price of the commodity produced is $80 per unit
and the cost of the input is $40 per unit, how much
profits will the firm make if it maximizes profits?

An industry has two firms - a Stackelberg leader and
a follower. The price of the industry output is given
by P = 84−Q, where Q is the total output of the two
firms. The follower has a marginal cost of $0. The
leader has a marginal cost of $21. How much should
the leader produce in order to maximize profits?