02 Jun Question Suppose the production function is given by Q = 5K + 3L. What is the average product of capital when 10 units of capital and 10 units of labor are employed?
Question
Suppose the production function is given by Q = 5K + 3L. What is the average product of capital when 10 units of capital and 10 units of labor are employed?
5
8
3
30
Consider a market characterized by the following inverse demand and supply functions:
PX = 30 – 3QX and PX = 10 + 2QX. Compute the surplus consumers receive when a $24 per unit price floor is imposed on the market.
$0.
$12.
$24.
$6.
Suppose the demand for good X is given by Qxd = 10 – 2Px + Py + M. The price of good X is $1, the price of good Y is $10, and income is $200. Given these prices and income, how much of good X will be purchased?
1.
210.
218.
None of the statements associated with this question are correct.
Suppose market demand and supply are given by Qd = 100 – 2P and QS = 5 + 3P. If the government sets a price floor of $20 and agrees to purchase all surplus at $20 per unit, the total cost to the government will be:
$1,200.
$20.
$100.
$1,300.
Suppose demand is given by Qxd = 25 ? 5Px + 2Py + Ax, where Px = $10, Py = $5, and Ax = $100. What is the advertising elasticity of demand for good x?
1
1.18
0.85
0.52
For a cost function C = 100 + 5Q + 2Q2, the average variable cost of producing 10 units of output is:
10.
25.
35.
None of the answers are correct.
Suppose the demand for X is given by Qxd = 100 – 2PX – 4PY + 10M + 2A, where PX represents the price of good X, PY is the price of good Y, M is income, and A is the amount of advertising on good X. Based on this information, we know that good X is a:
substitute for good Y and a normal good.
complement for good Y and an inferior good.
complement for good Y and a normal good.
substitute for good Y and an inferior good.
You’ve recently learned that the company where you work is being sold for $300,000. The company’s income statement indicates current profits of $11,000, which have yet to be paid out as dividends. Assuming the company will remain a “going concern” indefinitely and that the interest rate will remain constant at 9 percent, at what constant rate does the owner believe that profits will grow?
Instruction: Round your response to 2 decimal places.
Growth rate of:
percent.
The supply curve for product X is given by QXS = -520 + 20PX .
a. Find the inverse supply curve.
P= + Q
b. How much surplus do producers receive when Qx = 400? When Qx = 1,200?
When QX = 400: $
When QX = 1,200: $
A firm produces output according to a production function:
Q = F(K,L) = min {2K,4L}.
a. How much output is produced when K = 2 and L = 3?
b. If the wage rate is $30 per hour and the rental rate on capital is $10 per hour, what is the cost-minimizing input mix for producing 4 units of output?
Capital:
Labor:
c. How does your answer to part b change if the wage rate decreases to $10 per hour but the rental rate on capital remains at $20 per hour?
Capital increases and labor decreases.
It does not change.
Capital decreases and labor increases.
Capital and labor increase.
Suppose the cross-price elasticity of demand between goods X and Y is -4. How much would the price of
good Y have to change in order to change the consumption of good X by 10 percent?
If Starbucks’s marketing department estimates the income elasticity of demand for its coffee to be 2.9, how will the prospect of an economic bust (expected to decrease consumers’ incomes by 4 percent over the next year) impact the quantity of coffee Starbucks expects to sell?
Instruction: Round your response to 2 decimal places.
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