Economics Exam

1. The population demand function of a product Qd=7-P. The supply function of the
product is Qs= -5+2P, where Qd and Qs – demand and supply volumes in mln units
per year, P – price in tg.
1) Determine the equilibrium price and sales volume
2) Assume that the fixed price is set 3 tg per unit. Determine sales volume and the volume
of unsatisfied demand (deficit).
3) Assume that a new tax paid by a seller in an amount of 1.5 tg per unit was introduced to
this product. Find the equilibrium sales volume and prices for a customer (P+) and seller
(P-).
4) Determine surplus of a seller and buyer until and after tax introduction. Calculate the
amount of tax revenues to budget. Estimate public losses from the tax introduction.
2. Fill out this table

3. Fill in the gaps in the table

4. The function of company’s total cost is TC=100 Q – 2Q^2 + 0.04 Q^3. Find the
amount of marginal cost in Q=12 units.

5. The function of TR (total revenue) is TR=10Q – Q^2 + 2Q^3. What is the amount of
marginal revenue (MR) in output volume Q=5?
6. The population demand function of a product Qd=8-P. The supply function of the
product is Qs= -4+2P, where Qd and Qs – demand and supply volumes in mln units
per year, P – price in tg.
1) Determine the equilibrium price and sales volume
2) Assume that the fixed price is set 4 tg per unit. Determine sales volume and the volume
of unsatisfied demand (deficit).
3) Assume that a new tax paid by a seller in an amount of 2 tg per unit was introduced to
this product. Find the equilibrium sales volume and prices for a customer (P+) and seller
(P-).
4) Determine surplus of a seller and buyer until and after tax introduction. Calculate the
amount of tax revenues to budget. Estimate public losses from the tax introduction.
7. Fill out this table

8. Assume that a technology of production is shown by the production function

Q=√(KL). The firm’s cost is 36 cur.units in wage rate w=4cur.units and rent rate
r=6 cur.units. Find optimum production volume. Budget limitation of a company is
C = w*L + r*K

9. Fixed cost of a company is 55 cur.units. The function of company’s marginal cost is

MC= 22 -8Q + 3Q^2 + 2 Q^3. Determine the function of total cost in Q=3 units.
10. Kate has 12 cur. units, which she spends to newspapers and cookies. Each
newspaper costs 2 cur. units, and each cookie – 1 cur. unit. The next table illustrates
total utility for Kate from reading of a newspaper and consuming of cookies.

11. portion sweets apple

1 60 150
2 40 120
3 20 90
Price of 1 kg sweets -80 cur.unit, and price of 1 kg apple– 160 cur.unit. Consumer
budget is 400 cur.unit. Find optimal consumption volume of sweets and apple.

12. The demand function of product X is Qdx=14-Px + 0.1Py. The price of product X –
6 cur.unit, price of product Y – 10 cur. Unit. Find the ratio of cross elasticity of
demand of product X by price of product Y.
13. The demand function of product is Qd=8-P, and supply function of product is Qs = -
4 + 2P. Assume , that tax was introduced as 20% of buyer’s price. Calculate the
consumer surplus pre and post tax introduction.

14. The fixed cost of a company is 80 cur.unit. The function of marginal cost is MC = 30
– 10 Q + 6 Q^2 + 1.6 Q^3. Find the function of company’s total cost and calculate
this cost in output 3 product units.
15. Demand function to product of monopoly is Qd=16-P, and function of total cost TC
=14+Q^2. What is the price of monopoly in order to maximize profit?

16. The total cost function of monopoly is TC=30 + 20Q; and demand function of
monopoly in two markets are: P1=40-2Q1, P2 = 80 – 10Q2. Determine sale volume
and prices on two markets that maximize profit of monopoly.

17. Demand function to product of monopoly is Qd=180-2P, and function of total cost
TC =2Q^2+90. What is the price of monopoly in order to maximize profit?
18. Production of table in city X is monopolized by company Z. What will be the price
of company Z if total cost is TC = 10Q, and demand elasticity by price for table is (-
5)?

19. The total cost function of monopoly is TC=30000 + 50Q, demand function of
product is P=100- 0.01Q. Find:
a) Price in which profit is maximum, also this profit
b) Price and profit in which tax in the amount of 10 cur.unit per product is paid
c) Price and profit, if a company will pay tax for capital as amount of 200 cur.unit

20. The price of demand of monopoly is given in the table.

a) Calculate marginal revenue of monopoly
b) What is output for profit maximization of monopoly in fixed marginal cost as 5
cur.unit.
21. The population demand function of a product Qd=8-P. The supply function of the
product is Qs= -5+2P, where Qd and Qs – demand and supply volumes in mln units
per year, P – price in tg.
1) Determine the equilibrium price and sales volume
2) Assume that the fixed price is set 2 tg per unit. Determine sales volume and the volume
of unsatisfied demand (deficit).
3) Assume that a new tax paid by a seller in an amount of 1 tg per unit was introduced to
this product. Find the equilibrium sales volume and prices for a customer (P+) and seller
(P-).
4) Determine surplus of a seller and buyer until and after tax introduction. Calculate the
amount of tax revenues to budget. Estimate public losses from the tax introduction.
22. Assume, we have the following information about company’s activity, its marginal
revenue is given by function MR = 1000 – 20Q, marginal cost MC = 100 + 10Q.
What is the amount of product and price if:
a) a firm is acting as monopoly
b) a firm is acting in conditions of perfect competition

23. The demand function of product is Qd=15-3P, and supply function of product is Qs
= -5 + 2P. Assume , that tax was introduced as 20% of buyer’s price. Calculate the
consumer surplus pre and post tax introduction.
24. The total cost function of monopoly is TC = 2Q^2+90, and function of demand is
Q=180 -2P. Determine the price of profit maximization.

25. The population demand function of a product Qd=8-P. The supply function of the
product is Qs= -5+2P, where Qd and Qs – demand and supply volumes in mln units
per year, P – price in tg.
1) Determine the equilibrium price and sales volume
2) Assume that the fixed price is set 3 tg per unit. Determine sales volume and the volume
of unsatisfied demand (deficit).
3) Assume that a new tax paid by a seller in an amount of 2 tg per unit was introduced to
this product. Find the equilibrium sales volume and prices for a customer (P+) and seller
(P-).
4) Determine surplus of a seller and buyer until and after tax introduction. Calculate the
amount of tax revenues to budget. Estimate public losses from the tax introduction.
26. Cost 1000 tg, Excise Duty 10%, VAT 12%, Selling price with VAT 4000 tg,
Wholeseller’s markup 10%, Retailer’s markup 25%. Find profit and retailing price.
Also show the structure of retailing price as a pie diagram.
27. A firm is producing cigarettes and acting in terms of monopolistic competition. The
function of marginal revenue of firm is as MR = 10-2Q, and increasing part of long
term marginal cost curve is LMC= 2Q-2. If minimum meaning of long term average
cost (LAC) is equal to 6, what is the surplus of production power for company?

28. Two firms are acting in industry, and marginal cost of them is same and equal to
zero. Demand of indusry’s product is P=100-Q.
a) Determine price and production volume, if there is free competition in industry.
b) Determine price and volume of production, if companies are incorporated into cartel.

29. Two firms are acting in industry, they divide market equally. Demand on product of
this industry is P= 400 – 2Q. Marginal cost of firm is fixed and equal to 10. How
many products are produced by each firm and what is the market price?
30. The company is a perfect competitor on factor market (labor). In determined
capital the production function is Q=200 L – 5L^2. The rate of wage (w) is 100 cur.
units, and product price (p) = 5 cur. units.
1)Determine the demand function of a firm by labor (Ld)
2) How many Labor is used by company?
31. Select the better option of getting income by interest rate I =10%
a) Whole life rent by amount of 2600 cur.unit in year
b) Getting revenue by the following chart: 5000 first year and 8000 at the end of second
year and 20600 at the enf of third year.

32. A firm is staying in terms of perfect competition on market of product and labor. Its
production function is Q=120 L – 2 L^2. The wage rate is 40 cur units, product
price is 10 cur. units. Determine optimal product output for the firm.
33. A person is expecting to get the next revenues: 100 cur.unit in the first year, 150 in
second, 200 in third, 250 cur.unit in fourth year. Interest rate 20 % annually. What
is the today value for incomes in 4 years.