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ECON515 Spring 2023
Answer all questions. All questions are equally weighted. Show your work for full credit.
1. The demand curve is given by
Qd=100-2Px
a. What is the total revenue function?
b. What is the marginal revenue function?
c. At what price is revenue maximized.
d. What is the maximum revenue at the above price?
2. The demand curve is given by
QD = 500 –
5Px + 0.51
10Py
-2Pz
where
QD = quantity demanded of
good X
Px = price of good
X
I = consumer income, in thousands
Py = price of good
Y
Pz = price of good
Z
a. Based on the demand curve above, is
X a normal or an inferior good?
b. Based on the demand curve above, what is the relationship between good
X and good
Y?
c. Based on the demand curve above, what is the relationship between good
X and good
Z?
d. What is the equation of the demand curve if consumer incomes are $30,000, the price of good
Y is $10, and the price of good
Z is $20?
demand curve.
3.The supply curve is given by
Qs = – 200 +
20 Py – 5Pi +
0.5Pz
where
Qs = quantity supplied of good
X
Px = price of good
X
Pi = price of inputs to good
X
Pz = price of good
Z
a. Based on the supply curve above, what is the relationship between good
X and good
b. What is the equation of the supply curve if input prices are $10
and the price of
Z is $20?
c. What is the minimum price at which the firm will supply any of good
X at all?
d..If the price of good X is $25, what is the quantity supplied?
4. What is a long run equilibrium in constant cost industry?
ECON515 Spring 2023
Answer all questions. The FIVE questions are equally weighted. Show your work for full credits.
1. – Consider the supply of computers. For each of the
··· following, state the effect on supply:
a. A change in technology that increase production costs
b. A decrease in the price of semiconductors
c. A decrease in the price of computers
d. An increase in the wages of computer assembly workers
e. A decrease in consumer incomes
2. Consider the demand for computers. In each of the following, state the effect on demand
a. decrease in consumer income.
b. An Increase in the price of computers
c. An increase in the price of internet service providers
3. A market demand and supply curves are given as:
Qd= 500-2P
Qs=-100+ 3p
a. What is the equilibrium price.
b. What is the equilibrium quantity.
c. If the current price is $100, what is the quantity demanded and supplied?
d. How much is the surplus or shortage?
4. What is the difference between ARC elasticity and point elasticity?
5.
The demand curve is given by
Qd=500-2Px
a. What is the total revenue function?
b. What is the marginal revenue function?
c. At what price is revenue maximized.
d. What is the maximum revenue at the above price?
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