Short test #9

November 17, 2021. 3:30 PM.

Instructions for online submission
Please, work out your answers to the following questions on separate sheet(s) of paper in
cursive handwriting and draw the necessary figures. After completion, scan or
photograph your test paper and submit it by sending your PDF or JPG file(s) to the
following email address by 5:00 PM today the very latest:
Galbacs.Peter@uni-bge.hu
with the subject ‘TEST 9 submission’.
Late submissions (i.e., arriving after 5:01 PM), submissions in files other than PDF or
JPG (DO NOT use a cloud service), and submissions via other channels (e.g. TEAMS,
COOSPACE, unannounced email addresses, etc.) will all be ignored.
I. Mathematical problems (5 points in sum)
100
a) The average cost function of a firm is 𝐴𝐶 = 2𝑞 2 − 5𝑞 + 15 + . Find the other six cost
𝑞
functions.
b) The total cost function of a firm is 𝑇𝐶 = 2𝑞 3 − 5𝑞 2 + 10𝑞 + 500. Find the other six cost
functions.

c) A company’s production function is 𝑞 = √𝐾𝐿. In the short-run, the stock of physical

̅ = 25. Factor prices are 𝑃𝐿 = 5 and 𝑃𝐾 = 10. Find all the cost functions.
capital is given as 𝐾
II. Literature review (5 points in sum)
Give a summary on how De Vroey describes Lucas’s methodology.