Beruflich Dokumente
Kultur Dokumente
BSE 3-2
SOLUTION:
1 -1 0
|J|=
= - 1 1 = 1- +
- 0 1
When P= 0
Q=300-5(0) =300
The point elasticity will be
e= (-1) ( ) = -1 ( )=0
.
When P= 20
Q=300-5(20) = 200
The point elasticity will be
e= (-1) () = -1 ( .) = = 0.5
When P= 40
Q=300-5(40) = 100
The point elasticity will be
e= (-1) () = -1 ( )= =2
.
3.) In a basic Keynesian macroeconomic model it is assumed that Y= C + I where I= 250 and C=
0.75 Y. What is the equilibrium level of Y? What increase in I would be needed to cause Y to
increase to 1200?
SOLUTION:
Y= C + I
=0.25Y + 250
0.25Y=250
Y= K I
Where K= investment multiplier
1
K= 1
MPC= (0.75Y) = 0.75
1 1
K= 10.75 =0.25 = 4
Y=1200-1000=200
I= 50 (required increase in I)
SOLUTION:
.
(i) MPL= L = 10K0.5 L -0.5 =
.
5.) A multiplant monopoly operates two plants whose total cost schedules are
TC1 = 36 + 0.003q13 TC2= 45 +0.005q23
If its total output is sold in a market where the demand schedule is p=320-0.1q, where q= q1+q2, how
much should it produce in each plant to maximize total profits?
SOLUTION:
TR = PQ = (3200.1q) q
=320q 0.1q2
Substituting (q1+q2) for q
TR= 320 (q1+q2) - 0.1 (q1+q2)2
TR =320q1+320q2- 0.1q12-0.2 q1q2-0.1q22
Subtracting the two total cost schedules
=TR- TC1- TC2
= 320q1+320q2- 0.1q12-0.2 q1q2-0.1q22 (36+0.003q13)-(45+ 0.005q23)
= 320q1+320q2- 0.1q12-0.2 q1q2-0.1q22 -36-0.003q13 -45- 0.005q23
And
Subtract
-0.009q12+ 0.015q22 =0
0.009
q22=(0.015) q12= 0.6q12
0.35492 11.64598
=
0.018
0.354923.412619
= 0.018
.
q1= .
=169.87
Substituting
q2= 0.07746q1
q2 =0.07746(169.87) = 131.58
q1=169.87
q2= 131.58
6.)
Fy 24 t
Fy= 4y
According to Eulers equation,
24t= (4y)
24 t=4y
24 = 4"
12t2 +c1 =4y
Integrate,
(12 2 + 1 ) = 4
4t3 +c1t+c2=4y
Equals to
1 2
Y=t3+ +4
4
2
Y (0) = =1 or c2=4
4
1
Y (1) 1+ +1=3 or c2= 4
4
Y (t) = t3 +t+1
7.)
SOLUTION:
q1=120-0.8p1+0.5p2
0.8p1=120+0.5 p2-q1
p1=150+0.625p2-1.25q1
TR=p1q1
= (150+0.625p2-1.25q1) q1
TR =150 q1+0.625 p2q1-1.25q12
MR1= =150+0.625p2-2.5q1
q
=0.625
8.) Explain the Ramsey Continuous Model and its corresponding Intertemporal Efficiency
Condition
According to the intertemporal efficiency condition, K (t) is a stock variable, while its time of change
investment is a flow variable. Base on the context of dynamic optimization, capital stock K (t) is a
state variable, while the consumption is affected by investment is the control variable.
9.)
(1) = e-pt U C =0
(2) = f (k) or [f (k)- ] =0
(3) = TVC =
Explain the Application of Partial Differentiation in the concept of Wage Efficiency Model
Y=f [e (w) L]
Y=f (effective labor)
Effective labor= e (Wage)
2
< 0 (Increase in input; decrease in output)
eL
10.) A multiplant monopoly operates two plants whose total cost schedules are
TC1 = 36 + 0.003q13 TC2= 45 +0.005q23
If its total output is sold in a market where the demand schedule is p=320-0.1q, where q= q1+q2, how much
should it produce in each plant to maximize total profits?
SOLUTION:
TR = PQ = (3200.1q) q
=320q 0.1q2
Substituting (q1+q2) for q
TR= 320 (q1+q2) - 0.1 (q1+q2)2
TR =320q1+320q2- 0.1q12-0.2 q1q2-0.1q22
And
Subtract
-0.009q12+ 0.015q22 =0
0.009
q22=(0.015) q12= 0.6q12
0.35492 11.64598
=
0.018
0.354923.412619
= 0.018
.
q1= .
=169.87
Substituting
q2= 0.07746q1
q2 =0.07746(169.87) = 131.58
q1=169.87
q2= 131.58