Questions and Answers

Roby Syaiful Ubed

STAN

Question 1
(Q1) A firm produces two products, X and Y. The production
technology displays the following costs, where C(i,,j)
represents the cost of producing i units of X and j units of Y:
C(0,50) = 100
C(5,0) = 150
C(0,100) = 210
C(10,0) = 320
C(5,50) = 240
C(10,100) = 500
Does this production technology display economies of scale?
Of cope?

Question 2
(Q2) A monopoly's demand curve is P = 200 3
Q. It MC = $20. How many customers should be
serviced by this company? What is the price
paid by each customer? What will the
company's gross revenue be in this venture?

Question 3
(Q3) What are the goals of an economic
system? What is the criteria to measure the
effectiveness of a system?

Question 4
Consider the supply curve Q=2P 4 and demand curve Q=60 2P.
(a) Find the equilibrium price and quantity in this market both
algebraically and graphically.
(b) Suppose that the good in question becomes more popular such
that demand curve shifts to the right by 16 units. That is, at every
price where there was positive demand before consumers want to
purchase 16 more units of the good. In this case then new demand
curve is given by Q=76 2P. Draw this new demand curve on your
original graph and find the new equilibrium price and quantity.