As01 微观经济学

Microeconomics
ECON2113,Session L3&L4,Fall2014
Weiwei Hu(weiweihu@ust.hk)
Homework1
Due Friday,September19.
Question1.(10points)Suppose that Yucatan’s production possibilities are
Food Sunscreen
(pounds per month)(gallons per month)
300and0
200and50
100and100
0and150
a)(2points)Draw a graph of Yucatan’s PPF and explain how your graph illustrates a
tradeoff.
b)(2points)If Yucatan produces150pounds of food per month,how much sunscreen
must it produce if it achieves production efficiency?
c)(2points)What is Yucatan’s opportunity cost of producing1pound of food?
d)(2points)What is Yucatan’s opportunity cost of producing1gallon of sunscreen?
e)(2points)What is the relationship between your answers to parts(c)and(d)?
Question 2.(10points)Thefigure below shows Prakash’s and Gail’s production possibilities frontiers for writing books and magazine articles
a)(3points)What is Prakash’s opportunity cost of a book?What is Gail’s opportunity
cost?Who has the comparative advantage in writing books?
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b)(3points)Who has the comparative advantage in writing magazine articles?
c)(4points)According to their comparative advantages,who should write books and
who should write magazine articles?
Question3.(10points)Omar and John canfix computers or write computer programs. The table below shows the number of computers they canfix and the lines of code they can write in a day.
a)(2points)Who,if anyone,has the absolute advantage?
b)(4points)Who has the comparative advantage infixing computers?Why?
c)(4points)Who has the comparative advantage in writing programs?Why?
Omar’s production in1day John’s production in1day Computersfixed124
Lines of code800200
Question4.(10points)The world demand for power transmission wire is made up of both domestic and foreign demands.Thus,the total demand is the sum of the two sub-demands,which are given as:Domestic demand:P d=5−0.005Q d Foreign demand:
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P f=3−0.00075Q f,where P d and P f are in dollars per pound,and Q d and Q f are in pounds per day.
a)(3points)Determine the world demand for power transmission wire.
b)(3points)Determine the prices at which domestic and foreign buyers would enter the
market.
c)(2points)Determine the domestic and foreign quantities at P=$2.50per pound.
Check to see if the sum of Q d and Q f equals Q.
d)(2points)Determine total rate of purchases at P=$4.00per pound.
Question5.(10points)Suppose that the long-run world demand and supply elasticities of crude oil are-0.906and0.515,respectively.The current long-run equilibrium price is $30per barrel and the equilibrium quantity is16.88billion barrels per year.
a)(5points)Derive the linear long-run demand and supply equations.
b)(5points)Next,suppose the long-run supply curve you derived above consists of
competitive supply and OPEC supply.If the long-run competitive supply equation is:SC=7.78+0.29P,what must be OPEC’s level of production in this long-run equilibrium?
Question6.(10points)Midcontinent Plastics makes80fiberglass truck hoods per day for large truck manufacturers.Each hood sells for$500.00.Midcontinent sells all of its product to the large truck manufacturers.Suppose the own price elasticity of demand for hoods is0.4and the price elasticity of supply is1.5.
a)(4points)Compute the slope and intercept coefficients for the linear supply and
demand equations.
b)(3points)If the local county government imposed a per unit tax of$25.00per
hood manufactured,what would be the new equilibrium price of hoods to the truck manufacturer?
c)(3points)Would a per unit tax on hoods change the revenue received by Midcontinent?
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Question7.(10points)Suppose that a small market Major League Baseball team currently charges$12for a ticket.At this price,they are able to sell12,000tickets to each game.If they raise ticket prices to$15,they would sell11,053tickets to each game.
a)(5points)What is the price elasticity of demand at$12?
b)(5points)If the demand curve is linear,what is the algebraic expression for demand?
Question8.(20points)The demand curves for steak,eggs,and hot dogs are given in the table below.The current price of steak is$5.The price of eggs is$2.50,and the price of hot dogs is$0.75.
Fill in the remaining columns of the table using this information(2points×9). Indicate which goods are substitutes and which goods are complements(2points).
Good Demand Equation Steak Price
Elasticity of
Demand Egg Price
Elasticity of
Demand
Hotdog Price
Elasticity of
Demand
Steak DS=500-2PS-PE+PH
Egg DE=75-3PE-PS+PH
Hotdog DH=300-PH+PS+PE
Question9.(4points)Suppose that when the price of oil is$60per barrel,the quantity supplied is70million barrels a day,but when the price is$40per barrel,the quantity of oil supplied is69million barrels a day.
Which of the following statement is the correct answer?
a)The supply of oil is elastic.
b)The supply of oil is inelastic.
c)The demand for oil is inelastic.
d)The demand for oil is elastic.
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Question10.(6points)June makes holiday wreaths and sells them during the holiday season.Thefigure above shows her supply curve of wreaths per e the midpoint method in this problem.
a)(2points)Calculate the percentage change in quantity between points A and B.
b)(2points)Calculate the percentage change in price between points A and B.
c)(2points)Calculate the price elasticity of supply between points A and B.
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