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Assignment Two

Uploaded by

Tewodros B. Gete
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© © All Rights Reserved
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4 views

Assignment Two

Uploaded by

Tewodros B. Gete
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Exercises: Evaluate the limit of the following functions

lim x 2  2 x  4
 x 1

x2  9
lim
x 3 x  3

1
lim
x4 x  4

2x2  7
lim
x  6  3 x 2

x 1
lim 2
x 1 x  2 x  1

Exercises
1. A firm faces the demand curve P=17-3Q. Find an expression for TR and MR in terms of
Q.
2. A firms total cost curve is given by TC=Q3- 4Q2+12Q+3000. Find an expression for
a) AC
b) MC
c) When does AC=MC?
3. For example, the marginal revenue function corresponding to TR = 100Q+2Q2
4. If the (inverse) Demand equation is P = 200 – 40Q. Calculate the price elasticity of
demand when Q = 20.
5. If the consumption function is given by C = 0.7Yd+40. Find marginal propensity to
consume and saving function.
6. If TU = 15 q + 7q2 – (1/3)q3, find (a) the MU function, (b) the satiation point (utility
maximizing point)
7. The firm has the following total cost and total revenue functions, TC = q3 - 7q2 + 111q +

50 and TR= 100Q - Q2. Find profit maximizing level of output and what will be the total
profit at this level of output?
Exercises
1. A firm’s marginal cost function is MC = q2 − 6q + 12, where q is the number of units
produced. The total cost is equal to $280 when output is zero. Find
a. the total cost function
b. AFC,
c. AVC,
d. AC
2. The firm’s marginal cost function is given by MC = q2 +2q + 4, where q is the number of
units produced. Fixed costs are $3000. Find the total cost of producing 40 goods when fixed
cost is $3000.?
3. The marginal revenue function of a monopolistic producer is MR = 10 -4Q. Find the total
revenue function and deduce the corresponding demand equation.
4. Find the additional total revenue from increasing sales of 10 to 25 units for the producer in
pure competition for whom MR = 10.
5. A manufacturer’s marginal profit is π′ = −3q2 + 80q + 140. Find the total profit when 4 units
are produced.

6. p  1 q and p  10  5q . Find consumer and producer surplus using the given demand
2 8
and supply functions.
7. Find an expression for the consumption function if the marginal propensity to consume is
0.1
given by MPC  0.5  and consumption is 85 when income is 100.
y

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