# Analyzing Accumulated Change Integrals in Action. Improper Integral

Size: px
Start display at page:

Transcription

1 Analyzing Accumulated Change Integrals in Action 6.1 -Perpetual Accumulation and Improper Integrals Improper Integral Definite integrals have specific numbers for both the upper limit and the lower limit. In this section, what happens to the accumulation of change when one or both of the limits of the integral are infinite is considered. Improper integrals play a role in economics and statistics as well as in other fields of study. 1

2 Improper Integral Evaluations An improper integral of the form is evaluated by applying a limit: Replace with a variable, N. Evaluate the limit of the integral as N increases without bound, provided the limit exists. Evaluating Improper Integrals where F is an anti-derivative of f. Improper integrals show up in situations in which quantities are being evaluated over an indefinitely long interval. 2

3 Divergence and Convergence If the limit of an improper integral exists, the improper integral converges. Sometimes the limit of an improper integral does not exist. (The limit increases or decreases without bound.) In this case, improper integral diverges. EXAMPLE 3

4 Example EXAMPLE: 2, 6, 8, 12, 18, 20 4

5 Analyzing Accumulated Change Integrals in Action Streams in Business and Biology Income Stream and Flow Rates An income stream is a regular flow of money that is generated by a business or an investment. The rate of flow is a function Rthat varies according to time t. Constant %allocated + profit Linear % allocated (profit ± increment * t) Exponential % allocated (1+ % increase) Exponential % allocated (1 - % decrease) 5

6 Future Value of a Continuous Income Stream Suppose that an income stream flows continuously into an interest-bearing account at the rate of R(t) dollars per year, where t is measured in years and the account earns interest at 100r% compounded continuously. The future value of the account at the end of T years is Flow Rates and Rates of Change The flow rate for a continuous income stream is not the same thing as the rate of change of that stream. Using the Fundamental Theorem of Calculus, the rate-ofchange function for future value is: The function F (t)= R(x) e r(t-t) gives the rate of change (after t years) of the future value (in T years) of an income stream whose income is flowing continuously in at a rate of per year. The rate-of-change function, rather than the flow rate of the income stream,, is graphed when illustrating future value as the area of a region beneath a rate-of-change function. 6

7 Present Value of a Continuous Stream The present value of a continuous income stream is the amount P that would need to be invested at the present time so that it would grow to a specified future value under stated conditions. Suppose that an income stream flows continuously into an interest-bearing account at the rate of R(t) dollars per year, where t is measured in years, and that the account earns interest at the annual rate of 100r% compounded continuously. The present valueof the account is Present Value of a Continuous Income Stream (when the future value is known) 7

8 Perpetual Income Streams When there is no specific end date to an income stream, the stream is considered to flow in perpetuity. For example, when a company leases land rights from its parent corporation to harvest bio-mass from that land for the life of the company, the parent corporation might, in turn, create a fund with the lease money that allows it to purchase more land at some indefinite time. Because there is no definite end date for the income stream, it can be considered to flow in perpetuity. In the case of a perpetual income stream, the end time T is considered to be infinite and the present value of such a stream is calculated as the improper integral Example : 2, 4, 8 8

9 Streams in Biology Biology and other fields involve situations similar to income streams. An example of this is the growth of populations of animals. Functions that model biological streams where new individuals are added to the population and the rate of survival of the individuals is known are referred to as survival and renewal functions. Future Value of a Biological Stream The future value (in byears) of a biological stream with initial population size P, survival rate 100s% and renewal rate r(t), where tis the number of years, is + b 9

10 EXAMPLE: 22 Analyzing Accumulated Change Integrals in Action 6.3 -Calculus in Economics Demand and Elasticity 10

11 Demand function or Demand curve Understanding consumer demand is important in economics, management, and marketing. The amount of a good or service that consumers buy can be considered as a function of the price they have to pay. This function is known as a demand function or demand curve. Demand Functions Demand is affected by several factors, including utility(usefulness), necessity, the availability of substitutes, and buyer income. However, when all other factors are held constant, the quantity demanded can be considered as a function of market price. 11

12 Demand Function A function giving the expected quantity of a commodity purchased at a specified market price is referred to as a demand function or demand schedule. The demand function Drelates the input variable p (price per unit) with the output variable q = D(p) (quantity). The graph of a demand function is referred to as a demand curve. The Law of Demand All other factors being constant, as the price of a commodity increases, the market will react by demanding less and, as the price of a commodity decreases, the market will react by demanding more. 12

13 Why does my economics text show demand as a function of quantity? In economic theory, many functions (such as cost, revenue, and profit) are graphed with quantity on the horizontal axis. The demand curve is likewise drawn with quantity on the horizontal axis. Reading the economics text carefully can reveal whether price or quantity is considered to be the input variable. If quantity is considered to be the input variable, the economics text is dealing with the inverse demand function. If price is considered to be the input variable, the economics text is simply drawing the demand function on a reversed set of axes to keep quantity on the horizontal axis. Consumer Expenditure Consumer expenditure is the price per unit of a commodity times the quantity purchased by consumers. Assuming that demand is satisfied, the quantity purchased is the same as the quantity in demand. This expenditure is represented graphically as the area of a rectangle under the demand curve. 13

14 For a commodity with demand function D and price per unit p, when market price is fixed at p 0, the quantity demanded is written q 0 = D(p 0 ) and Consumer expenditure = p 0. q 0 Consumer Surplus Consumer surplus is the amount that consumers are willing and able to spend but do not actually spend because the market price was fixed at p0. This is the amount that consumers have in excess from not having to spend as much as they were willing and able. 14

15 Consumer Willingness and Ability to Spend When consumers demand a certain quantity of a commodity, they are willing and able to pay more (as an aggregate) than they actually spend at the correlating market price. Consumer willingness and ability to spend is the total amount of money consumers have available and are willing to pay to obtain a certain quantity of a commodity. Consumer Willingness and Ability to Spend For a continuous demand function D, the amount that consumers are willing and able to spend for a certain quantity of a commodity is given by Consumer Expenditure Consumer Surplus 15

16 Consumer Willingness and Ability to Spend where p 0 is the market price at which q 0 units are in demand, and p max is the price above which consumers will purchase none of the commodity. (If the demand function approaches but does not cross the input axis, the integral is improper with an upper limit of.) Example: 12, 14, 24 16

17 Price Elasticity of Demand Elasticity is a measure of the responsiveness of a function s output to a change in its input variable. Because the measures of the quantities of output and input are normally very different, elasticity uses a ratio of percentage rates of change to compare relative changes. For a commodity with differentiable demand function D and price per unit p, the price elasticity of demand is Demand is elastic when ƞ > 1 and inelastic when ƞ < 1. Demand is at unit elasticity when ƞ = 1. Price elasticity of demand is normally negative Example: 28 17

18 Analyzing Accumulated Change Integrals in Action 6.4 -Calculus in Economics Supply and Equilibrium Calculus in Economics Supply and Equilibrium Supply Function A function giving the expected quantity of a commodity supplied at a specified market price is referred to as a supply function or supply schedule. The supply function S relates the input variable p(price per unit) with the output variable q = S(p) (quantity). The graph of a supply function is referred to as a supply curve. 18

19 Shutdown The shutdown price, p s, is the lowest market price that producers are willing and able to accept to supply any quantity of a certain commodity. The shutdown point is the point (p s, S(p s ))on the supply curve that marks the conditions (market price and quantity)under which the production of a commodity will shut down. Producer Revenue Producer revenue is the price per unit of a commodity times the quantity supplied to the market (assuming the entire quantity is also purchased at market price). Producer revenue is represented graphically as the area of a rectangle with one corner at the origin (0, 0) and the opposite corner on the supply curve at point (p 0, q 0 ) where p 0 is the market price. Producer revenue = p 0. q 0 19

20 Producer Willingness and Ability to Receive For a continuous supply function S, the minimum amount producers are willing and able to receive for a certain quantity of a commodity is given by where p 0 is the market price at which q 0 units are supplied, and p s is the shutdown price.(if there is no shutdown price, p s =0.) Producer Surplus The amount that producers receive in excess of the minimum amount that they require to supply a certain quantity of a commodity is known as producer surplus. Producer surplus benefits society as a whole because producers are able to use surplus to develop better or different products, invest in other economic sectors, or pass it on to their employees as money or added benefits. 20

21 Producer Surplus Producer surplus is calculated as producer revenue minus producer willingness and ability to receive: Producer revenue Producer willingness to pay Producer surplus = Equilibrium and Social Gain The market price and quantity (p*, q*) at which supply equals demand is called the equilibrium point. At the equilibrium price p*, the quantity demanded by consumers coincides with the quantity supplied by producers. This quantity is q*. Society benefits when consumers and/or producers have surplus funds. 21

22 total social gain When the market price of a product is the equilibrium price for that product, the total benefit to society is the consumers surplus plus the producer surplus. This amount is known as the total social gain. EXAMPLE: 10, 16, 22, 24 22

### MATH 2070 Mixed Practice Sections

Name: Directions: For each question, show the specific mathematical notation that leads to your answer. Round final answers to three decimals unless the context dictates otherwise. 1. The demand for board

### Chapter 4 DEMAND. Essential Question: How do we decide what to buy?

Chapter 4: Demand Section 1 Chapter 4 DEMAND Essential Question: How do we decide what to buy? Key Terms demand: the desire to own something and the ability to pay for it law of demand: consumers will

### 1. Explain 2. Describe 3. Create 4. Interpret

Law of Demand Section:- B Objectives 1. Explain the law of demand. 2. Describe how the substitution effect and the income effect influence decisions. 3. Create a demand schedule for an individual and a

### Ch. 7 outline. 5 principles that underlie consumer behavior

Ch. 7 outline The Fundamentals of Consumer Choice The focus of this chapter is on how consumers allocate (distribute) their income. Prices of goods, relative to one another, have an important role in how

### a. Graph the demand curve in figure 1. Page 1 Practice Homework Elasticity Economics 101 The Economic Way of Thinking

Price Practice Homework ity Economics 101 The Economic Way of Thinking 1. The table below shows demand data for fountain soft drinks. Columns 4 and 5 show the average percent change in price and quantity

### Supply and Demand. Objective 8.04

Supply and Demand Objective 8.04 Supply and Demand Pages 258-259 259 copy bold terms and give a definition or description of each. Page 261 Copy the questions Worksheet A-2A 1. Surplus When the amount

### ECON 102 Micro Principles Exercise 2. Multiple Choice Questions. Choose the best answer July 24,2008

1 ECON 102 Micro Principles Exercise 2 Multiple Choice Questions. Choose the best answer July 24,2008 1. When marginal benefit (MB) is greater than marginal cost (MC) A) the economy produces too little

### Professor Christina Romer SUGGESTED ANSWERS TO PROBLEM SET 2

Economics 2 Spring 2016 rofessor Christina Romer rofessor David Romer SUGGESTED ANSWERS TO ROBLEM SET 2 1.a. Recall that the price elasticity of supply is the percentage change in quantity supplied divided

### Demand - the desire, ability, and willingness to buy a product.

Demand - the desire, ability, and willingness to buy a product. The Law of Demand states that the quantity demanded of a good will be greater at lower prices than will be demanded at higher prices. Thus

### This is what we call a demand schedule. It is a table that shows how much consumers are willing and able to purchase at various prices.

Demand Market: an institution or mechanism, which brings together buyers ("demanders") and sellers ("suppliers") of particular goods and services. The remainder of this unit assumes a perfectly competitive

### Supply and Demand. Worksheet A-2A 2014

Supply and Demand Worksheet A-2A 2014 Worksheet A-2A 1. Surplus When the amount supplied exceeds the demand 2. Shortage When the amount demanded exceeds the supply 3. Utility The power to satisfy your

### Demand - the desire, ability, and willingness to buy a product.

Demand - the desire, ability, and willingness to buy a product. 1. You must have the desire for the product 2. You must be able to make a purchase 3. You must be willing to make a purchase 4. Purchases

### Elasticity and Its Applications

Elasticity and Its Applications 1. In general, elasticity is a. a measure of the competitive nature of a market. b. the friction that develops between buyer and seller in a market. c. a measure of how

### CHAPTER 4, SECTION 1

DAILY LECTURE CHAPTER 4, SECTION 1 Understanding Demand What Is Demand? Demand is the willingness and ability of buyers to purchase different quantities of a good, at different prices, during a specific

### Chapter 4: Demand. Section I: Understanding Demand. Section II: Shifts of the Demand Curve. Section III: Elasticity of Demand

Chapter 4: Demand Section I: Understanding Demand Section II: Shifts of the Demand Curve Section III: Elasticity of Demand Section 1: Understanding Demand LEQ: What is the law of demand? VOCAB: demand

### Topic 3. Demand and Supply

Econ 103 Topic 3 page 1 Topic 3 Demand and Supply Text reference: Chapter 3 and 4. Assumptions of the competitive model. Demand: -Determinants of demand -Demand curves -Consumer surplus -Divisibility -

### Study Guide Final Exam, Microeconomics

Study Guide Final Exam, Microeconomics 1. If the price-consumption curve of a commodity slopes downward how can you tell whether the consumer spends more or less on this commodity from her budget (income)?

### 1) Your answer to this question is what form of the exam you had. The answer is A if you have form A. The answer is B if you have form B etc.

This is the guide to Fall 2014, Midterm 1, Form A. If you have another form, the answers will be different, but the solution will be the same. Please consult your TA or instructor if you think there is

### Midterm 2 - Solutions

Ecn 100 - Intermediate Microeconomic Theory University of California - Davis November 13, 2009 Instructor: John Parman Midterm 2 - Solutions You have until 11:50am to complete this exam. Be certain to

### Chapter 4: Demand Section 3

Chapter 4: Demand Section 3 Objectives 1. Explain how to calculate elasticity of demand. 2. Identify factors that effect elasticity. 3. Explain how firms use elasticity and revenue to make decisions. Copyright

### The University of Zambia School of Humanities and Social Sciences The Department of Economics

The University of Zambia School of Humanities and Social Sciences The Department of Economics ECN 1115 INTRODUCTION TO MICRO ECONOMICS- ASSIGNMENT 1 Attempt ALL Questions and briefly explain why your answer

### NAME: INTERMEDIATE MICROECONOMIC THEORY FALL 2006 ECONOMICS 300/012 Final Exam December 8, 2006

NAME: INTERMEDIATE MICROECONOMIC THEORY FALL 2006 ECONOMICS 300/012 Section I: Multiple Choice (4 points each) Identify the choice that best completes the statement or answers the question. 1. The slope

### Individual & Market Demand and Supply

Mr Sydney Armstrong ECN 1100 Introduction to Microeconomic Lecture Note (3) Individual & Market Demand and Supply The tools of demand and supply can take us a far way in understanding both specific economic

### Ecn Intermediate Microeconomic Theory University of California - Davis June 11, 2009 Instructor: John Parman. Final Exam

Ecn 100 - Intermediate Microeconomic Theory University of California - Davis June 11, 2009 Instructor: John Parman Final Exam You have until 8pm to complete the exam, be certain to use your time wisely.

### Practice Midterm Exam Microeconomics: Professor Owen Zidar

Practice Midterm Exam Microeconomics: 33001 Professor Owen Zidar This exam is comprised of 3 questions. The exam is scheduled for 1 hour and 30 minutes. This is a closed-book, closed-note exam. There is

### Answers to the Take-Home Midterm Examination

Answers to the Take-Home Midterm Examination Econ 111s Spring/Summer 2009 Economics Department, Queen s University Instructor: Jean-Denis Garon Posted: June 19 Here are the main elements of the answers.

### MATH 2070 Final Exam Mixed Practice (MISSING 6.5 & 6.6)

The profit for Scott s Scooters can be estimated by P(x, y) = 0.4x + 0.1y + 0.3xy + 2y + 1.5x hundred dollars, where x is the number of mopeds sold and y is the number of dirt bikes sold. (Check: P(3,2)

### MICROECONOMICS DIAGRAMS

MICROECONOMICS DIAGRAMS 1. Abnormal Profit 5. Average Fixed Costs 2. ad valorem tax At Qpm, Ppm > Pcost All costs are covered and then some! 6. Average Product The red line diminishes, but never becomes

### Chapter 2: The Basic Theory Using Demand and Supply. Multiple Choice Questions

Chapter 2: The Basic Theory Using Demand and Supply Multiple Choice Questions 1. If an individual consumes more of good X when his/her income doubles, we can infer that a. the individual is highly sensitive

### DEMAND ESTIMATION (PART I)

BEC 30325: MANAGERIAL ECONOMICS Session 02 DEMAND ESTIMATION (PART I) Dr. Sumudu Perera Session Outline Definition of Demand Law of Demand Price Elasticity of Demand Elasticity and Total Revenue Income

### !"#\$#%&"'()#*(+,'&\$-''(.#/-'((

Lecture 1 Basic Concerns of Economics What is Economics! Economics is the study of how society manages its scarce resources. o Economic Problem: How a society can satisfy unlimited wants with limited resources

### 1.4 Applications of Functions to Economics

CHAPTER 1. FUNCTIONS AND CHANGE 18 1.4 Applications of Functions to Economics Definition. The cost function gives the total cost of producing a quantity of some good. The standard notation is: q = quantity,

### Policy Evaluation Tools. Willingness to Pay and Demand. Consumer Surplus (CS) Evaluating Gov t Policy - Econ of NA - RIT - Dr.

Policy Evaluation Tools Evaluating Gov t Policy - Econ of NA - RIT - Dr. Jeffrey Burnette In economics we like to measure the impact government policies have on the economy and separate winners and losers.

### Unit 2: Theory of Consumer Behaviour

Name: Unit 2: Theory of Consumer Behaviour Date: / / Notations and Assumptions A consumer, in general, consumes many goods; but for simplicity, we shall consider the consumer s choice problem in a situation

### Week 1 (Part 1) Introduction Econ 101

Week 1 (art 1) Introduction Econ 101 reliminary Concepts (Chapter 2 g 38-41 & 47-50) Economics is the study of how individuals and societies choose to use scarce resources that nature and previous generations

### PRICING IN COMPETITIVE MARKETS

PRICING IN COMPETITIVE MARKETS Some markets, such as those for agricultural commodities and gasoline, seem to have just one price at any given time. All producers in the market charge the same or very

### Chapter 5: Price Controls: Multiple Choice Questions Chapter 6: Elasticity Multiple Choice Questions

Chapter 5: Price Controls: Multiple Choice Questions 1. ANSWER: d. ceiling. 2. ANSWER: a. a shortage, which cannot be eliminated through market adjustment. 3. ANSWER: b. the equilibrium price is below

### Chapter 6 Elasticity: The Responsiveness of Demand and Supply

hapter 6 Elasticity: The Responsiveness of emand and Supply 1 Price elasticity of demand measures: how responsive to price changes suppliers are. how responsive sales are to changes in the price of a related

### Eastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester

Duration: 50 minutes Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2016-17 Fall Semester ECON101 - Introduction to Economics I Quiz 2 Answer Key 16 December

### Answers to the Problems Chapter 11

Answers to the Problems Chapter 11 1. a. Lin is operating in a perfectly competitive market. b. The equilibrium price is determined by the equilibrium between the market demand and the market supply. c.

### Reading Essentials and Study Guide

Lesson 3 Elasticity of Demand ESSENTIAL QUESTION What are the causes for a change in demand? Reading HELPDESK Academic Vocabulary technical related to a particular subject such as art, science, or trade

### This is the midterm 1 solution guide for Fall 2012 Form A. 1) The answer to this question is A, corresponding to Form A.

This is the midterm 1 solution guide for Fall 2012 Form A. 1) The answer to this question is A, corresponding to Form A. 2) Since widgets are an inferior good (like ramen noodles) and income increases,

### Chapter 2: The Basic Theory Using Demand and Supply. Multiple Choice Questions

Chapter 2: The Basic Theory Using Demand and Supply Multiple Choice Questions 1. If an individual consumes more of good X when his/her income doubles, we can infer that a. the individual is highly sensitive

### Chapter Summary and Learning Objectives

CHAPTER 11 Firms in Perfectly Competitive Markets Chapter Summary and Learning Objectives 11.1 Perfectly Competitive Markets (pages 369 371) Explain what a perfectly competitive market is and why a perfect

### CHAPTER 2 THEORY OF DEMAND AND SUPPLY. Unit 3. Supply. The Institute of Chartered Accountants of India

CHAPTER 2 THEORY OF DEMAND AND SUPPLY Unit 3 Supply Learning Objectives At the end of this unit you will be able to : understand the meaning of supply. understand what determines supply. get an insight

### not to be republished NCERT Chapter 6 Non-competitive Markets 6.1 SIMPLE MONOPOLY IN THE COMMODITY MARKET

Chapter 6 We recall that perfect competition was theorised as a market structure where both consumers and firms were price takers. The behaviour of the firm in such circumstances was described in the Chapter

### Eco402 - Microeconomics Glossary By

Eco402 - Microeconomics Glossary By Break-even point : the point at which price equals the minimum of average total cost. Externalities : the spillover effects of production or consumption for which no

### ECON 4550 (Fall 2011) Exam 1

ECON 455 (Fall 211) Exam 1 Name Multiple Choice Questions: (4 points each) 1. Jimmy is risk neutral. He is faced with a random payoff with expected value of \$2,. Further, for this payoff the highest possible

### ECO401 Current Online 85 Quizzes Question Repeated ignore In Green color are doubted one

ECO401 Current Online 85 Quizzes Question Repeated ignore In Green color are doubted one Question # 1 of 15 ( Start time: 01:24:42 PM ) Total Marks: 1 A person with a diminishing marginal utility of income:

### Microeconomics. Use the graph below to answer question number 3

More Tutorial at Microeconomics 1. Opportunity costs are the values of the: a. minimal budgets of families on welfare b. hidden charges passed on to consumers c. monetary costs of goods and services *

### Microeconomics. Use the graph below to answer question number 3

More Tutorial at Microeconomics 1. Opportunity costs are the values of the: a. minimal budgets of families on welfare b. hidden charges passed on to consumers c. monetary costs of goods and services *

### Problem Set 3 21 September 2007

Eco 301 Name Problem Set 3 21 September 2007 1. Suppose that the U.S. demand and supply for soft drinks are given by Q D = 300-2 P Q S = 4 P The price is in cents per can and quantity is in millions of

### SENIOR SCHOOL CERTIFICATE EXAMINATION

SENI SCHOOL CERTIFICATE EXAMINATION JULY-05 GENERAL INSTRUCTIONS : MARKING SCHEME ECONOMICS (DELHI) Expected Answers / Value Points (SET-III). Please examine each part of a question carefully and then

### Chapter 4 Review: Demand. CHAPTER 4 Graphic Organizer

Chapter 4 Review: Demand CHAPTER 4 Graphic Organizer CHAPTER 4, SECTION 1 Key Concepts What Is Demand? A market is a place where people buy and sell things. A market has two sides. There is a buying side

### Macro Unit 1b. This is what we call a demand schedule. It is a table that shows how much consumers are willing and able to purchase at various prices.

Macro Unit 1b Demand Market: an institution or mechanism, which brings together buyers ("demanders") and sellers ("suppliers") of particular goods and services. Notice that the remainder of this unit assumes

### ECONOMICS 103. Topic 3: Supply, Demand & Equilibrium

ECONOMICS 103 Topic 3: Supply, Demand & Equilibrium Assumptions of the competitive market model: all agents are price takers, homogeneous products. Demand & supply: determinants of demand & supply, demand

### UNIVERSITY OF CALICUT SCHOOL OF DISTANCE EDUCATION 1 ST SEMESTER B A ECONOMICS MULTIPLE CHOICE QUESTION CORE COURSE MICRO-ECONOMICS

UNIVERSITY OF CALICUT SCHOOL OF DISTANCE EDUCATION 1 ST SEMESTER B A ECONOMICS MULTIPLE CHOICE QUESTION CORE COURSE MICRO-ECONOMICS Question Bank 1) Worth a rupee to a consumer is called: (a) Marginal

### ORGANIZING YOUR THOUGHTSII Use the diagram to help you take notes. Supply and prices are related. Indicate how they are related in the diagram.

Chapter 21, Section 1 For use with textbook pages 462 465 What Is Supply? KEY TERMS supply the various quantities of a good or service that producers are willing to sell at all possible market prices (page

### Economics: Introduction

Economics: Introduction Study notes for the Introduction To Economics (section 1) and introduction to Miceconomics (section 2) By Nils Österberg for nilsnotes On HL paper two there are usually three out

### Exam A Questions Managerial Economics BA 445. Exam A Version 2

BA 445 Exam A Version 2 Dr. Jon Burke This is your Exam A. Exam A is a 100-minute exam (1hr. 40 min.). There are 6 questions (about 17 minutes per question). To avoid the temptation to cheat, you must

### ECON 251. Exam 1 Pink. Fall 2013

ECON 251 1. By definition, opportunity cost is a. The value of the best alternative b. The sum of the value of all available alternatives c. The amount of money it takes to buy an item d. Always greater

### BUSINESS ECONOMICS (PAPER IV-PART I)

BUSINESS ECONOMICS (PAPER IV-PART I) (60 MARKS) Q1: Macroeconomics is also called economics (a) applied (b) aggregate (c) experimental (d) none Q2: A Study of how increase in the corporate income tax rate

### Eastern Mediterranean University Faculty of Business and Economics Department of Economics Spring Semester

Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2015 16 Spring Semester ECON101 Introduction to Economics I First Midterm Exam Duration: 90 minutes Answer Key

### Chapter 4. Demand, Supply and Markets. These slides supplement the textbook, but should not replace reading the textbook

Chapter 4 Demand, Supply and Markets These slides supplement the textbook, but should not replace reading the textbook 1 What is a market? A group of buyers and sellers with the potential to trade 2 What

### Now suppose a price ceiling of 15 is set by the government.

1. The demand function is Q d = 1 2, and the supply function is = 10 + Q s. a. What is the market equilibrium price and quantity? b. What is the consumer surplus, producer surplus, dead weight loss (WL)

### Ecn Intermediate Microeconomic Theory University of California - Davis March 19, 2009 Instructor: John Parman. Final Exam

Ecn 100 - Intermediate Microeconomic Theory University of California - Davis March 19, 2009 Instructor: John Parman Final Exam You have until 5:30pm to complete the exam, be certain to use your time wisely.

### Preview from Notesale.co.uk Page 6 of 89

Guns Butter 200 0 175 75 130 125 70 150 0 160 What it shows: the maximum combinations of two goods an economy can produce with its existing resources and technology; an economy can produce at points on

### ECON (ENT) COURSE LESSON THREE. Supply and Demand. CHAPTER 7 Supply and Demand. Lesson Three Supply and Demand 93

ECON (ENT) COURSE LESSON THREE Supply and Demand CHAPTER 7 Supply and Demand Lesson Three Supply and Demand 93 EXERCISES Matching (28 points) From the list below, select the term that matches each of the

### INSTITUTE OF RISING STARS

INSTITUTE OF RISING STARS 1/9,Lalita Park, Main Vikas Marg,Laxmi Nagar Chapter 2 Theory of Demand and Supply 1. Which of the following pairs of goods is an example of substitutes? (a) Tea and sugar (b)

### Lecture 11. Firms in competitive markets

Lecture 11 Firms in competitive markets By the end of this lecture, you should understand: what characteristics make a market competitive how competitive firms decide how much output to produce how competitive

### Econ Microeconomics Notes

Econ 120 - Microeconomics Notes Daniel Bramucci December 1, 2016 1 Section 1 - Thinking like an economist 1.1 Definitions Cost-Benefit Principle An action should be taken only when its benefit exceeds

### Managerial Economics Prof. Trupti Mishra S.J.M School of Management Indian Institute of Technology, Bombay. Lecture -29 Monopoly (Contd )

Managerial Economics Prof. Trupti Mishra S.J.M School of Management Indian Institute of Technology, Bombay Lecture -29 Monopoly (Contd ) In today s session, we will continue our discussion on monopoly.

### Exam 01 - ECON Friday, October 1st

Name: Exam 01 - ECON 2301-05 - Friday, October 1st Figure 1 1. Refer to Figure 1. This economy has the ability to produce at which point(s)? a. A, B, D b. A, B c. C, F, G d. A, B, C, F, G 2. Any point

Question # 1 of 15 ( Start time: 01:24:42 PM ) Total Marks: 1 A person with a diminishing marginal utility of income: Will be risk averse. Will be risk neutral. Will be risk loving. Cannot decide without

### Practice Midterm Exam Microeconomics: Professor Owen Zidar

Practice Midterm Exam Microeconomics: 33001 Professor Owen Zidar This exam is comprised of 3 questions. The exam is scheduled for 1 hour and 30 minutes. This is a closed-book, closed-note exam. There is

### Econ 200 Lecture 7 January 24, 2017

1. Learning Catalytics Session 2. Elasticity and Total Revenue Econ 200 Lecture 7 January 24, 2017 3. Cross-Price and Income Elasticities 4. Elasticity of Supply 5. Consumer & Producer Surplus 1 Total

### Problem Set 3 Eco 112, Spring 2011 Chapters covered: Ch. 6 and Ch. 7 Due date: March 3, 2011

Problem Set 3 Eco 112, Spring 2011 Chapters covered: Ch. 6 and Ch. 7 Due date: March 3, 2011 There are 30 multiple choice questions in this problem set. Answer these questions by the beginning of the class

### ECONOMICS SOLUTION BOOK 2ND PUC. Unit 6. I. Choose the correct answer (each question carries 1 mark)

Unit 6 I. Choose the correct answer (each question carries 1 mark) 1. A market structure which produces heterogenous products is called: a) Monopoly b) Monopolistic competition c) Perfect competition d)

### Exam 01 - ECON Friday, October 1st

Name: ID: A Exam 01 - ECON 2301-05 - Friday, October 1st 1. Demand is said to be inelastic if the a. quantity demanded changes proportionately the same as price. b. quantity demanded changes proportionately

### Ecn Intermediate Microeconomic Theory University of California - Davis December 10, 2008 Professor John Parman.

Ecn 100 - Intermediate Microeconomic Theory University of California - Davis December 10, 2008 Professor John Parman Final Examination You have until 12:30pm to complete the exam, be certain to use your

### Final Exam - Solutions

Ecn 100 - Intermediate Microeconomic Theory University of California - Davis December 10, 009 Instructor: John Parman Final Exam - Solutions You have until 1:30pm to complete this exam. Be certain to put

### ASSESSMENT TOPICS. TOPIC 1: Market & Resource Allocation PEC 4123: ECONOMIC ENVIRONMENT FOR BUSINESS 10/13/2016

ASSESSMENT PEC 4123: ECONOMIC ENVIRONMENT FOR BUSINESS Course Work: 60% - Time Constrained Assessment 20% - Case Analysis & Presentation 30% - Participation 10% Examination: 40% TOTAL: 100% TOPICS 1. Markets

### 1. Welfare economics is the study of a. the well-being of less fortunate people. b. welfare programs in the United States.

1. Welfare economics is the study of a. the well-being of less fortunate people. b. welfare programs in the United States. c. the effect of income redistribution on work effort. d. how the allocation of

### CHAPTER 2: DEMAND AND SUPPLY

CHAPTER 2: DEMAND AND SUPPLY CIA4U Ms. Schirk 2.3 THE MARKET A market can be: A physical place where goods are bought and sold A collective reference to all the buyers and sellers of a particular good

### CHAPTER 2: DEMAND AND SUPPLY

2.3 THE MARKET CHAPTER 2: DEMAND AND SUPPLY CIA4U Ms. Schirk A market can be: A physical place where goods are bought and sold A collective reference to all the buyers and sellers of a particular good

### Economics 411 Managerial Economics. Instructor: Ken Troske

Economics 411 Managerial Economics Instructor: Ken Troske 1 About the Course Business Economics applies basic economic principles to the types of problems faced by business decisionmakers. Particular attention

### An Economic Analysis of the Cattlemen s Beef Promotion and Research Board Demand-Enhancing Programs

An Economic Analysis of the Cattlemen s Beef Promotion and Research Board Demand-Enhancing Programs Dr. Harry M. Kaiser Cornell University 2014 Summary and Conclusions In this study, an independent evaluation

### CHAPTER 4: DEMAND. Lesson 3: elasticity of demand

CHAPTER 4: DEMAND Lesson 3: elasticity of demand 3 CASES OF DEMAND ELASTICITY Because quantity demanded depends on its price, economists use a concept called elasticity. Elasticity is a measure of responsiveness

### Econ 101, section 3, F06 Schroeter Exam #2, Red. Choose the single best answer for each question.

Econ 101, section 3, F06 Schroeter Exam #2, Red Choose the single best answer for each question. 1. Which of the following is consistent with elastic demand? a. A 10% increase in price results in a 5%

### Chapter 1- Introduction

Chapter 1- Introduction A SIMPLE ECONOMY Central PROBLEMS OF AN ECONOMY: scarcity of resources problem of choice Every society has to decide on how to use its scarce resources. Production, exchange and

### Economic Analysis for Business Decisions Multiple Choice Questions Unit-2: Demand Analysis

Economic Analysis for Business Decisions Multiple Choice Questions Unit-2: Demand Analysis 1. The law of demand states that an increase in the price of a good: a. Increases the supply of that good. b.

### Chief Reader Report on Student Responses:

Chief Reader Report on Student Responses: 2018 AP Microeconomics Free-Response Questions Number of Students Scored 90,032 Number of Readers 91 Score Distribution Exam Score N %At 5 18,827 20.9 4 25,070

### Topic 1: Demand and Supply

Topic 1: Demand and Supply Topic 1 page 1 For an economist, the behaviour of demanders and suppliers of goods is motivated by economic or incentives. For example, consumers will modify their consumption

### Advanced Microeconomic Analysis, Lecture 7

Advanced Microeconomic Analysis, Lecture 7 Prof. Ronaldo CARPIO April 24, 2017 Administrative Stuff The midterm exam will be returned next week. I will post a new homework, HW #3, on the website later

### Unit 6 Perfect Competition and Monopoly - Practice Problems

Unit 6 Perfect Competition and Monopoly - Practice Problems Multiple Choice Identify the choice that best completes the statement or answers the question. 1. One characteristic of a perfectly competitive

### MIDTERM EXAM August 16th, Monday, 2010 (80 POINTS)

MIDTERM EXAM August 16th, Monday, 2010 (80 POINTS) UID: NAME: TYPE: DEMAND READ CAREFULLY. 1. You have 1 hour and 30 minutes. Allocate your time wisely. 2. Solve ALL questions. 3. Show your work for essay

### Final Exam - Solutions

Ecn 100 - Intermediate Microeconomics University of California - Davis December 7, 2010 Instructor: John Parman Final Exam - Solutions You have until 12:30 to complete this exam. Be certain to put your