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Microeconomics
A FIRM’S MARKET DEMAND IS P = 26 - Q. TWO IDENTICAL FIRMS HAVE COST FUNCTIONS C = 64 + 2Q, WHERE Q IS EACH FIRM'S INDIVIDUAL OUTPUT. (SO MC = 2.) THE FIRMS PRODUCE IDENTICAL PRODUCTS.
A. WHAT IS THE COURNOT-NASH EQUILIBRIUM MARKET PRICE AND OUTPUT? (8 PTS)
B. WOULD A THIRD IDENTICAL FIRM WANT TO ENTER? (6 PTS)
C. WHAT IS THE EQUILIBRIUM (MARKET PRICE AND QUANTITY OF EACH FIRM) IF THE FIRMS COLLUDE AND SPLIT THE MARKET EQUALLY? (6 PTS)
A. WHAT IS THE COURNOT-NASH EQUILIBRIUM MARKET PRICE AND OUTPUT? (8 PTS)
B. WOULD A THIRD IDENTICAL FIRM WANT TO ENTER? (6 PTS)
C. WHAT IS THE EQUILIBRIUM (MARKET PRICE AND QUANTITY OF EACH FIRM) IF THE FIRMS COLLUDE AND SPLIT THE MARKET EQUALLY? (6 PTS)
Microeconomics
An hour-long exam consists of two problems, each worth a maximum of 50 points. A student doesn’t have enough time to get full-credit on both questions. How should this student allocate his or her time spent on each problem to maximize the total score? Illustrate your answer using a figure. 6 mks
Microeconomics
A firm produces candles. The market for candles is highly competitive, with candles currently selling for $10. The firm's short-run total cost function is C = 200 + 0.2q2, so its marginal cost is MC = 0.4q.
A. What is the firm's profit-maximizing quantity? (6 mks)
B. Is the firm earning a profit? (7 mks)
C. What is the short-run shutdown price? (7 mks)
A. What is the firm's profit-maximizing quantity? (6 mks)
B. Is the firm earning a profit? (7 mks)
C. What is the short-run shutdown price? (7 mks)
Microeconomics
Suppose that there are n bidders whose valuations vis are drawn independently and identically from the distribution F over [0, ω]. Describe and derive the symmetric , monotonic equilibrium in the first price auction. Derive an expression for the expected payment by a bidder.
Microeconomics
Suppose that there are two bidders whose valuations are distributed over [0, +∞], identically and independently according to the exponen tial distribution with parameter λ > 0. In other words, for any x > 0,
the p.d.f is f(x, λ) = λe^−λx
Derive the symmetric, monotonic equilibrium bid function for the first
price auction in this case.
the p.d.f is f(x, λ) = λe^−λx
Derive the symmetric, monotonic equilibrium bid function for the first
price auction in this case.
Microeconomics
Explain using graphics, the five competitive strategies that are used by businesses and give five examples of ways firms win competitive advantage. (15 marks)
Microeconomics
During the Liquidity Trap, LM curve is elastic or possitive,less elastic,more elastic ?
Microeconomics
Sum of MPC and MPS equals ?
Microeconomics
Income elasticity of demand for an inferior good is ?
Microeconomics
2. Here is the relationship between the number of worker-hours (L) and the number of apples produced (Q):
L Q
0 0
1 10
2 20
3 29
4 37
5 44
6 50
7 55
8 59
9 62
10 64
Assume wage is $10 per hour, and Total Fixed Cost is $20.
For each value of L (from 0 to 10), make a table showing: Marginal Product of Labour; Total Cost; Average Total cost; Marginal Cost. (Like Question 5 page 293 Nimbus Brooms). Explain why there is a relationship between Marginal Product and Marginal Cost.
L Q
0 0
1 10
2 20
3 29
4 37
5 44
6 50
7 55
8 59
9 62
10 64
Assume wage is $10 per hour, and Total Fixed Cost is $20.
For each value of L (from 0 to 10), make a table showing: Marginal Product of Labour; Total Cost; Average Total cost; Marginal Cost. (Like Question 5 page 293 Nimbus Brooms). Explain why there is a relationship between Marginal Product and Marginal Cost.
