Econ Class

In: Business and Management

Submitted By tz212121
Words 492
Pages 2
ECON 300
Assignment #3

1. Suppose that in a chemical plant: . Q =AL1/3 K1/2

Where Q is the output rate, L is the labor input, and K is the rate of capital input.
Statistical analysis indicates that α =1/3 and β =1/2, A=10

a) The owner of the plant claims that there is increasing return to scale, Is he right? b) If the cost of labor W =$ 6,the cost of capital r is =$ 2, and the price of output is $20/unit. Find the least cost combination of L and K and the level of output at which profit is maximized. What is the total cost at the optimum level of Q?

2. Frisbees are produced according to the production function:

Q = 2K + L where Q = output of Frisbees per hour
K = capital input per hour
L = labor input per hour

a) If K = 10 how much L is needed to produce 100 Frisbees per hour? b) If K =25 how much L is needed to produce 100 Frisbees per hour? c) Graph the Q = 100 isoquant. Indicate the points on that isoquant defined in part a and part b. What is the RTS along this isoquant? Explain why theM RTS is the same at every point on the isoquant. d) Graph Q = 50 and Q = 200 isoquants for this production function also describe the shape of the entire isoquant map. e) Suppose technical progress resulted in the production function for Frisbees becoming Q= 3K + 1.5L
Answer part a through part d for this new production function and discuss how it compares to the precious case.

3. A firm has the production function Q = 5LK. Where Q = output, L = amount of labor, and K = the amount of capital. a) Suppose the price of labor W = $1 per unit and the price of capital r= $2 per unit. The firm’s vice president hires you to figure out what combination of inputs the firm should use to produce 20 units of output. What advice will you give him? b) Suppose W increased to $2 per unit. What effects will this have on the…...

Similar Documents


...Econ Homework Chapter 3:Problem 2 2. Consider an economy in which taxes, planned investment, government spending on goods and services, and net exports are autonomous, but consumption and planned investment change as the interest rate changes. You are given the following information concerning autonomous consumption, the marginal propensity to consume, planned investment, government purchases of goods and services, and net exports: Ca=1500-10r ,c=0.6 ,T=1800 Ip=2400-50r ,G=2000 ,NX=-200 a. compute the value marginal propensity to save is as follows: 1-C=1-0.6=0.4 b. Autonomous planned spending, Ap, equals Ca − cTa + Ip + G + NX = 1,500 − 10r −.6(1,800) + 2,400 − 50r + 2,000 − 200 = 4,620 − 60r. Therefore, at an interest rate equal to 3, autonomous planned spending equals 4,620 − 60(3) = 4,440. c. Since the marginal propensity to save equals 0.4 and the equilibrium level of income equals Ap /s, the equilibrium level of income equals 4,440/.4 = 11,100, given the interest rate equals 3. d. Since autonomous consumption changes by 4 percent of any change in household wealth and the decline in the housing market in 2006–09 and drop in the stock market of 2007-09 reduces household wealth by 3 trillion dollars, the decrease in autonomous consumption that results from the decline in household wealth equals .04(3) = 120 billion. e. Since the decrease in autonomous consumption that results from the decline in household wealth equals 120 billion, autonomous......

Words: 326 - Pages: 2


...ECON 191, Fall 2012 Guidelines for Writing an Economics Research Paper Writing a good economics paper is both an exciting and a nontrivial task. It requires a sustained effort in identifying an important question and in developing a credible model to think about that question or a testable hypothesis to answer it. In many cases it may require collecting data that gives the opportunity to test the hypothesis that you develop. You are encouraged to structure your paper in four parts: introduction, literature review, body, and conclusion. A brief abstract of no more than 100 words should precede your paper. Introduction Identifying a significant and well formulated question is the single most important part of the research process and the most difficult as well. A good research question has to be concise (remember, you are writing a 15-page paper, not a book), feasible and important. Choosing a research question requires balancing importance and feasibility. Feasibility means tractability for theoretical research and data availability for empirical research. Whenever you come up with an idea for a research question, always try to think about a critic sitting in front of you asking “Why should I care about this?” Consider this question to be a first filter for your research question. Identify a well-defined research question. The introduction is where you (1) present the research question, (2) motivate why it is important and briefly outline (3) how you go about answering it...

Words: 1405 - Pages: 6


...Communist Manifesto. Easy read. Econ Final What is his booklet? Looking and analyzing our economy. (Consumer + investment + government + net exports) Workers/employees are exploited by owners (capitalists.) Liberals and conservatives reject this belief. They argue, whatever wages/benefits receive, as determined by the market, is what they deserve. The Concept of Exploitation. What is that? What is the main idea that separates a Marxist from a non-Marxist? What was the Keynesian equation that equalled GDP? C+I+G+Xn Liberal economists Money Employees make the surplus What defines money? M1 or M2 Capitalists control the surplus Velocity (388) Significant part of surplus is used for investment under capitalism. Profit (most of the surplus) What equation do conservative economists use? What is the Equation of Exchange? P•Q=GDP Interest Quantity What are the four variables? M•V=P•Q Price The number of times per year on average $1 goes around to generate $1 worth of income. Basically, average number of times the average dollar changes hands. Real output Rent What are the three components of surplus? M=200, P•Q=1000. what is V? V=5. Work performed by labor for capitalist. Profit. What is "Surplus Value" is associated with Marxism. Karl Marx M1: 1.5 trillion with. Velocity of 6 "If I give you three variables, should you be able to figure out the other variable?" Ruling Class, Capitlists Classes Struggle Working Class, struggling......

Words: 2975 - Pages: 12


...Econ Problem Set #3 1. Suppose that a comic book publisher pays an annual licensing fee of $20,000 for the rights to an artist’s character. Which would have a larger impact on the number of readers of the comic using this character: (i) an increasing in the printing costs associated with publishing the comic, or (ii) an increase in the artist’s licensing fee to $22,000. Please carefully explain your reasoning. The increase in printing cost would have the larger impact on the number of readers of the comic. Because the increase in printing cost could be thought as a variable cost increase. The increase in cost would vary when the quantity increases. The increase costs per book could be easily realized and thus the publisher would choose to increase the price of goods. The number of readers would thus decrease due to increase of selling price. For the increase in license fee, it would be considered as fixed cost, which is more important in the short run business instead of long run businesses. 2. A firm's total cost schedule and the demand for its product are summarized in the table below (a) Complete the table and use the tools discussed in the online lecture and in the book to determine the level of output that maximizes the firm's profit. Costs | Revenues | Quantity Produced | Total Cost | Marginal Cost | Quantity Demanded | Price | Total Revenue | Marginal Revenue | 0 | 0 | - | 0 | 155 | 0 | - | 1 | 70 | 70 |...

Words: 505 - Pages: 3


...Advancement of Marketing Education, Applied Business Review, Journal of Promotion Management, Journal of Global Business, Journal of Marketing Education, and Journal of the Academy of Business Education. Catalog Description  A study of those activities necessary to the design, pricing, promotion, and distribution of goods and services for use by organizations and ultimate consumers. Prerequisites  ECON 122 Principles of Economics II Junior Standing  Message from Dean’s Office: There will be absolute enforcement of every pre-requisite requirement for the course work offered by the Eberly College of Business & Information Technology. This means that students cannot postpone pre-requisites and take them after the course in question. The dean's office is responsible for monitoring course pre-requisites. Students who manage to register for course work in spite of the fact that they do not have the appropriate pre-requisite will be subject to unilateral withdrawal after the course has commenced. At that time, no appeal will be accepted, and adding a different class after the official registration period will not be approved. About Course Withdrawal  The individual course withdrawal deadline date of November 4, 2013 will be enforced. You may complete this withdrawal through the computer registration system. A Request for a Deadline Waiver must be sought through the Assistant Dean for Academic Services in Room 208. Requests will only be granted: (1) contingent upon...

Words: 1615 - Pages: 7


...increase inflation, and inflation is assumed to be influenced by rational expectations. In development economics, slower growth in developed nations has been sometimes predicted because of the declining marginal returns of investment and capital, and this has been observed in the Four Asian Tigers. Sometimes an economic hypothesis is only qualitative, not quantitative.[83] Expositions of economic reasoning often use two-dimensional graphs to illustrate theoretical relationships. At a higher level of generality, Paul Samuelson's treatise Foundations of Economic Analysis (1947) used mathematical methods to represent the theory, particularly as to maximizing behavioral relations of agents reaching equilibrium. The book focused on examining the class of statements called operationally meaningful theorems in economics, which are theorems that can conceivably be refuted by empirical data.[84] Empirical investigation Main articles: Econometrics and Experimental economics Economic theories are frequently tested empirically, largely through the use of econometrics using economic data.[85] The controlled experiments common to the physical sciences are difficult and uncommon in economics,[86] and instead broad data is observationally studied; this type of testing is typically regarded as less rigorous than controlled experimentation, and the conclusions typically more tentative. However, the field of experimental economics is growing, and increasing use is being made of natural......

Words: 17785 - Pages: 72

Econ 310

...PREREQUISITES: Econ 206 and Econ 207 COURSE DESCRIPTION: Public Finance deals with the taxing and spending activities of government. It is alternatively called Public Sector Economics or Public Economics. The focus of the course is on the microeconomic functions of government, and in particular the way that government affects the allocation of resources and the distribution of income. The analysis of the spending activities of government will include a discussion of public goods, externalities, education, welfare programs, Social Security and health care. On the tax side, we will build a framework for tax analysis, and then apply this framework to the personal income tax, the corporation income tax, and other U.S. taxes. COURSE OBJECTIVES: 1. To understand the economic rationale for government involvement in a market economy. 2. To learn about the major sources and uses of revenue in the United States fiscal system. 3. To develop your ability to analyze the equity and efficiency effects of government spending and taxation programs. 4. To learn how economic principles can be applied in an analysis of political decision-making. 5. To understand the links between public finance and various social, legal and environmental issues. COURSE METHODS: 1) Lecture and discussion. Topics and readings for the next class will be posted on Canvas. It is advisable to do the assigned reading before coming to class. 2) Study......

Words: 795 - Pages: 4

Econ Essay

...Economics Fall 2014 Course Outline Course # and Title: AP/ECON 4140 3.0A Financial Econometrics Course Webpage: Course Instructor/Contact: Name: Prof. Razvan Sufana Office: VH 1030 Phone: 416-736-2100 Ext. 66065 Office Hours: Tuesday 2 – 3 PM, Thursday 2:45 – 3:45 PM Email: (Please include course number in subject line) LectureTime and Location: Thursday 11:30 – 2:30 PM, ACE 002 Prerequisite: AP/ECON 3210 3.00 or AP/ECON 3500 3.00 or equivalent. Course Credit Exclusions: None. PRIOR TO FALL 2009: Course credit exclusion: AK/ECON 4130 3.00. Course Description: This course is an introduction to financial econometrics. Background knowledge of finance is not required. The objective of the course is to explain, in simple terms, the use of selected statistical methods and econometric models in finance. The content of the course includes simple static and dynamic models of financial returns, elements of portfolio theory, the CAPM regression model, elements of option pricing, the Value-at-Risk (VaR), and the ARCH model. Weighting of Course: Assignment 1 (12.5% of final grade): available October 2, due at beginning of class on October 9 Midterm Exam (30% of final grade): October 16 Assignment 2 (12.5% of final grade): available November 20, due at beginning of class on November 27 Final Exam (45% of final......

Words: 568 - Pages: 3


...Will Bury Business Proposal Econ/561 March 2, 2011 To: Whom it May Concern From: Will Bury Date: March 2, 2011 I have gathered you here today to discuss the future of my company Will Bury’s Digital Books. My company’s structure is monopolistic competition, which mean as demand increases, prices decrease. To make any profits, I have to make sure that my product is in demand (Halmos, 1995). After that, it is in my best interest to determine ways to increase revenue, minimize cost, profit maximizing quantity, concepts of marginal cost and marginal revenue, pricing and non-pricing, barriers to entry, and product differentiation. The things I have listed will ensure the success of my company. Increase Revenue and Minimizing Cost Increasing revenue and minimizing cost is what we strive to do as an organization. Many things considered in the process of creating a plan to increase revenue and minimize cost. I believe that I first need a budget to be set so I do not overspend; therefore, I will minimize cost because I will not spend any unnecessary money. One way to cut cot is to do just in time processing; orders are produced when orders are complete. This will prevent overstock. Instead of hiring a high school graduate or overseas staff, my plan is to partner with local colleges and getting some interns. I can get interns to work free; this will cut cost and ultimately increase revenue and minimize cost. Minimizing my variable cost is also away to minimize cost and......

Words: 1199 - Pages: 5


...Econ 371 Development Economics Homework 1 Due on Feb 9th, 12:30pm. You may discuss the assignment with your classmates but you are expected to complete and write up the homework independently. If you use online materials or from sources other than the assigned video and the lecture notes, then you must list your references. 1. The Many Faces of Underdevelopment Health conditions (for example, life expectancy and infant mortality rate) in an economy are an important aspect of economic development. 1) How is life expectancy correlated with the income level? Does this imply that better health conditions are the cause of a high level of income? Explain. Life expectancy is positively correlated with the income level. This does not imply that better health conditions are the cause of a higher level of income, because correlation does not imply causality. For example, the positively correlation between life expectancy and the income level may because a) better health conditions lead to higher income, or b) higher income lead to better health conditions, or c) something else cause both better health conditions and higher income. 2) According to basic growth models, do better health conditions contribute to higher income levels? Explain. Yes. Better health conditions means higher accumulation of human capital in an economy. According to the endogenous growth models, human capital is one type of capital. In basic growth models, capital accumulation is one of the driving......

Words: 1794 - Pages: 8


...ECON 410.502 Macroeconomic Theory Spring 2010 Instructor: Guangyi Ma Extra Problems #1 Suggested Answers and Comments Notice: (1) This set of extra problems contains 25 multiple-choice problems and 6 analytic (short-answer) problems. These problems are not homework and will not be graded. The aim of these problems is to provide you with additional exercises. (2) I will give solutions of the assignment and the “extra-problem” set after the due date. Page 1 Problem 1~25: Multiple choice problems 1. C 2. A 3. D This problem helps you pay attention to the difference between variables and functions. First, whether prices (wages are prices for labor) are assumed to be flexible or 4. C sticky depends on the time horizon. In other words, the assumption of flexible prices is proper in a long-run model while the assumption of sticky prices makes sense in a short-run model. Second, a large part of macro-theory is based on the optimizing behavior of individual agents, such as households and firms, but the main concern of macroeconomics is the movement of the whole economy aggregated from those individual decisions. 5. B Economists, as well as most other social scientists, cannot do controlled experiments. 6. A Consider the National Income Accounts Identity: Y = C + I + G + NX 7. B 8. C Inventory is a kind of investment, so the sale of inventory can be understood as a decrease of investment, but there is an increase in consumption in the same......

Words: 1249 - Pages: 5

Econ 312 Principles of Economics Complete Class Quizzes

...ECON 312 Principles of Economics Complete Class Quizzes ECON 312 Week 1 Quiz 1. (TCO 1) The general concern of economics is with the study of the 2. (TCO 1) The term scarcity in economics refers to the fact that 3. (TCO 1) Are the goods that businesses offer for “free” to consumers also free to society? 4. (TCO 1) Which is considered to be an economic resource by economists? 5. (TCO 1) If an economy is producing at a point inside a production possibilities curve, then 6. (TCO 1) Which would not be characteristic of a capitalist economy? 7. (TCO 1) The term dollar votes means 8. (TCO 1) The circular flow model 9. (TCO 1) In a market system, well-defined property rights are important because they 10. (TCO 1) Which is necessary to make a trade in a barter economy? 11. (TCO 1) Tammie makes $150 a day as a bank clerk. She takes off two days of work without pay to fly to another city to attend the concert of her favorite music group. The cost of transportation for the trip is $250. The cost of the concert ticket is $50. What is the opportunity cost of Tammie’s trip to the concert? Show your calculations 12. (TCO 1) Identify some intrinsic qualities of capitalist and command economic systems. Identify two countries that practice each. 1. (TCO 2) A demand curve 2. (TCO 2) In the past few years, the demand for donuts has greatly increased. This increase in demand might best......

Words: 2166 - Pages: 9


...25 markers Econ The term inflation means a persistent increase in the level of prices. The question believer that an increase in aggregate demand can cause inflation, however there can also be other factors that can cause inflation. The term aggregate demand is that total planed expenditure in the economy. Known by the identity C+I+G+(X-m). In macroeconomics there are 2 types of inflation, demand-pull inflation and cost-push inflation. The demand-pull inflation is caused by an increase in total spending (aggregate demand), the economy is producing beyond the economy’s ability. The aggregate demand in an economy strongly outweighs the aggregate supply, which cause the price to increase. As the economy reaches full capacity, firms will be struggling to produce enough to meet the rising demand. As you can see from the figure, AS is slow curving up and becoming inelastic because of full capacity. The demand curve then shifts to the right because of a high demand, from AD1 to AD2. This causes involuntary stock depletion due to a low supply. When this happens, firms will choose to increase price to widen the profit margins. So price level increase from P1 to P2. Furthermore, as employment in an economy increase, the demand in goods and services will be much more inelastic. This allows firm to increase the price more without any significant fall in demand. There are various reasons that can cause an increase in aggregate demand. First of all, a decrease in exchange rate......

Words: 626 - Pages: 3


...ECON Project I. Introduction The efficient market hypothesis says that these returns should not be systematically related to the information known in 1990. We have the data of the return of the stock prices from various firms over the four-year period between the end of 1990 and the end of 1994. If the characteristics of a firm reflected the return of the stock, this could help with predicting the stock price in the future. We hypothesize that the return of the stock are related to debt capital ratio, earnings per share, salary of the CEO, net income, logarithm of net income and salary, and the stock price at the end of 1990 and 1994. II. Literature Review We are formulating how the CEOs compensation can affect the stock prices within a four-year period between the end of 1990 and 1994.An investigation based on the use of individual evaluation in CEO’s incentive plans that contrasts with objective stock price based measures may involve. Using complementary data evidence can be shown that individual performance evaluation increases growth opportunities (Bushman p. 161-193). An examination of the executive compensation structure of 153 randomly-selected manufacturing firms in 1979–1980 provides evidence supporting advocates of incentive compensation, and also suggests that the form rather than the level of compensation is what motivates managers and CEOs to increase firm value (Hamid p. 163-184). III. Data and Methodology Our data is a list of observations from 142......

Words: 1407 - Pages: 6

Econ 545 Entire Class

...ECON 545 ENTIRE CLASS To purchase this visit following link: Contact us at: SUPPORT@ACTIVITYMODE.COM ECON 545 ENTIRE CLASS DEVRY ECON 545 Week 1 DQs 1 Supply and Demanв DEVRY ECON 545 Week 1 DQs 2 Elasticity and the Minimum Wage DEVRY ECON 545 Week 2 DQs 1 Marginal Analysis DEVRY ECON 545 Week 2 DQs 2 Controlling Costs DEVRY ECON 545 Week 2 Project Part 1 DEVRY ECON 545 Week 3 DQs 1 Mergers Acquisitions DEVRY ECON 545 Week 3 DQs 2 Anti-Trust Policy and Microsoft DEVRY ECON 545 Week 3 Quiz Imperfect Competition DEVRY ECON 545 Week 4 DQs 1 Macroeconomic News DEVRY ECON 545 Week 4 DQs 2 Healthcare DEVRY ECON 545 Week 5 DQs 1 Trade Deficits ECON 545 ENTIRE CLASS To purchase this visit following link: Contact us at: SUPPORT@ACTIVITYMODE.COM ECON 545 ENTIRE CLASS DEVRY ECON 545 Week 1 DQs 1 Supply and Demanв DEVRY ECON 545 Week 1 DQs 2 Elasticity and the Minimum Wage DEVRY ECON 545 Week 2 DQs 1 Marginal Analysis DEVRY ECON 545 Week 2 DQs 2 Controlling Costs DEVRY ECON 545 Week 2 Project Part 1 DEVRY ECON 545 Week 3 DQs 1 Mergers Acquisitions DEVRY ECON 545 Week 3 DQs 2 Anti-Trust Policy and Microsoft DEVRY ECON 545 Week 3 Quiz Imperfect Competition DEVRY ECON 545 Week 4 DQs 1 Macroeconomic News DEVRY ECON 545 Week 4 DQs 2 Healthcare DEVRY ECON 545 Week 5 DQs 1 Trade Deficits ECON 545 ENTIRE CLASS To purchase this visit......

Words: 1056 - Pages: 5