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Derive the long-run average and marginal cost curves. How do marginal and average costs change with increases in output? Explain.
What is Josie's marginal revenue from selling another kitten? (Express your answer as an equation.)
For which quantities does Mike's Bicycle Factory exhibit economies of scale? For which quantities does it exhibit diseconomies of scale?
Derive the firm supply curve for ice cream producers with extraordinary operations managers.
What short-run adjustments do you expect competing egg farmers to make as a result of this broadcast? What will happen to the profits of egg farms?
Draw a diagram showing the marginal cost of each unit that Marty produces. If flux capacitors sell for $2, determine the profit-maximizing quantity for Marty.
What is the level of Hack's fixed cost? What is Hack's short-run average variable cost of producing berries? (Express AVC as a function of Q.)
In the short run, how will this fee increase affect Iliana's output level? Her profit? In the long run, how will this fee increase affect Iliana's output le
Because of the entry/exit you described in part (a), what do you expect to happen to the industry supply of jelly? Explain.
What will the long-run equilibrium price of canola oil be? How many units of canola oil will each firm produce in the long run?
What will happen to the price of restaurant meals? How will individual firms respond to the change in price? Will there be entry into or exit from the industry?
Why is market price elasticity of demand also always lower than individual price elasticity of demand? Why or why not?
Suppose that at the prices PX and PY of good X and good Y, respectively, Kim is consuming. What is the price of good X in terms of the price of good Y?
Explain why the students must be wrong in their reasoning. Can you tell whether a good is normal or inferior by looking at shape of a single indifference curve?
What can the shape of the indifference curve tell us about two goods? How does the market demand relate to individual demand curves?
When the cross-price elasticity of demand is positive, are the two goods complements or substitutes? What type of goods have a negative cross-price elasticity?
Describe how to decompose the consumer's response to price changes into the substitution and income effects.
Describe how we can derive a consumer's demand curve from his indifference curves. Why would we expect the demand curve to slope downward?
Define the income effect. What variables do we hold constant in order to isolate the income effect? When might the Engel curve be more useful?
Solve Katie's utility-maximization problem using a Lagrangian. How much does Katie's utility increase if she receives extra dollar to spend on paint brushes?
What is Maggie's objective function? What is Maggie's constraint? Write a statement of Maggie's constrained optimization problem.
How does technological change affect a firm's output? What is an expansion path and how does it relate to a firm's total cost curve?
What is the marginal rate of technical substitution? How will a firm react to an increase in the price of one input relative to another?
How does the amount of output change as the isoquants are farther from the graph's origin? Why can't two isoquants cross?
What does a production function tell us? Why is a firm's marginal product of labor more relevant than the marginal product of capital in the short run?