PRACTICE QUESTIONS FOR THE FINAL EXAMINATION Questions 1 and 2 refer to the following information. A price-taking firm faces a product market price , produces according to the production function and...

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Hi i have my exam tomorrow of mathamics for business i have 10 mcq questions and 2 short questions we ahve 5 hours to do that



PRACTICE QUESTIONS FOR THE FINAL EXAMINATION Questions 1 and 2 refer to the following information. A price-taking firm faces a product market price , produces according to the production function and takes the wage and the rental cost of capital as given. Question 1 [10 marks] What is the profit-maximizing input combination ? Question 2 [10 marks] What is the value of the total profit function when this firm is maximizing profits? ------------------------------------------------------------------------------------------------------------------- Questions 3 and 4 refer to the following data: Production function: ( is measured in kilos per second) Wage rate: Rental cost of capital: Question 3 [10 marks] What is the minimum total cost of producing 0.5 (½ kilos per second)? Question 4 [10 marks] What is the maximum output level that can be produced for the cost outlay ? MULTIPLE-CHOICE QUESTIONS Question 5 The cross partials of the function are a. b. c. d. e. ---------------------------------------------------------------------------------------------------------------- Questions 6, 7, and 8 refer to Figure 1. This figure illustrates an optimization problem involving two products, namely X (aerobic exercise) and Y (TV viewing), and describes a ceteris paribus reduction in the relative price of X in terms of Y (), originated by a reduction in the price of X, denoted by . Both X and Y are measured in hours per week, and the respective pricesand are expressed in $ per hour. The indifference map depicted in Figure 1 satisfies the following properties: 1) the indifference curves do not cross; 2) higher indifference curves correspond to higher levels of utility; and 3) the indifference curves are negatively sloped. 6. If the consumer maximizes utility under the budget constraint, there are two constrained local optima before the reduction in the relative price, represented by the optimal bundles a. P and Q b. P and R c. P and S d. P and T e. S and Q 7.If the consumer maximizes utility under the budget constraint, the marginal rate of substitutions of aerobic exercise for TV viewing before and after the reduction in are, respectively: a. 1.25 and 0.40 b. 1.25 and 2.5 c. 0.80 and 0.40 d. 2.5 and 1.25 e. 0.40 and 0.80 8. If the consumer maximizes utility under the budget constraint, after the reduction in the relative price of aerobics in terms of TV viewing a. there are two constrained local optima, P and R b. there are two constrained local optima, P and Q c. there is only one constrained local optimum, S d. there is only one constraint local optimum, T e. there are two constrained local optima, P and T --------------------------------------------------------------------------------------------------------------------- Questions 9 and 10 refer to a three-sector economy where: Numbers are rounding to 2 decimal places. 9. The matrix multiplier is given by a. b. c. d. e. 10. How much will the economy have to produce to meet the given final demand vector? a. and b. and c. and d. and e. and PRACTICE ENDS HERE YYYY MMM DD Page 5 of 5 10 20 8 y 0 T S Q P R x Aerobic exercise TV viewing Figure 1 Faculty of Business School of Accounting, Economics and Finance Student to complete: Family name Other names Student number Table number ECON 222 Mathematics for Business Wollongong Campus Exam Book Final Examination Autumn 2021 Total Number of Questions: Part I: Multiple-choice Questions Each question is of equal value (6 marks each) No penalty is incurred for an incorrect answer. Twelve (12) questions Ten (10) questions Part II: Short-answer Questions Each question is of equal value (20 marks each) Two (2) questions This examination will be marked out of 100 and represents fifty (50) per cent of the Total Assessment PART I: MULTIPLE-CHOICE QUESTIONS Questions 1 and 2 refer to a consumer whose equilibrium happens when she maximizes her utility subject to her budget constraint. The consumer loves fast food decides how many pizzas (Product X) and burritos (Product Y) to eat per month based on the following utility function: where is the quantity consumed of pizzas per month and is the quantity consumed of burritos per month. Question 1 Initially, the price per pizza is and the price of one burrito, denoted by , is also Furthermore, the monthly consumer’s income, denoted by , is $100.00. The best affordable bundle is A. B. C. D. E. Question 2 Inflation engenders a new situation where prices and income have doubled, that is, What is the best affordable bundle in this new situation? A. A corner solution B. An interior solution C. D. E. Questions 3 and 4 refer to a profit-maximizing price-taking firm in both its input and output markets. The firm produces a single output according to the production function Question 3 In the initial situation, labour is paid an hourly wage rate and the hourly rental cost of capital is . The firm sells its product at a price per unit of output . Which of the following is true? A. The Hessian determinant evaluated at the profit-maximizing input combination is B. The profit-maximizing input combination is C. The marginal physical product of labour is D. The most profitable output level is E. The value of the marginal physical product of labour is Question 4 Inflation engenders a situation where all the prices have doubled. As a result, , , What is the profit-maximizing input combination in this new situation? A. B. A corner solution C. D. Prices are too high for the firm to be profitable E. Inflation distorts relative prices Question 5 The cross partials of the function are A. B. C. D. E. Question 6 The technology employed by a price-taking firm in both its input and output markets is described by the production function The firm is currently using the input combination Which of the following options is not true? A. The firm is experiencing diminishing returns with respect to both labour and capital. B. The firm is maximizing profits. C. The marginal physical product of labour is independent of the quantity of capital. D. The firm is producing units of output. E. Enough information is supplied to provide an answer. Questions 7 and 8 refer to a consumer whose utility function is where and are the quantities she consumes of the only two products X (food) and Y (entertainment) available to her. This consumer is always maximizing her utility subject to her budget constraint. Question 7 If the best affordable bundle for the consumer is , that is, six (6) units of food and three (3) units of entertainment, then the relative price of food in terms of entertainment is exactly A. $0.50 B. 0.50 C. $2.00 D. 2.00 E. Not enough information is supplied to provide an answer Question 8 If the price of each unit of food is $2.00 and a unit of entertainment costs $4.00, the highest indifference curve this consumer can attain with an income of $24.00 is A. B. C. D. E. Not enough information is supplied to provide an answer Question 9 This question refers to a firm using two inputs (labour and capital) whose production technology is described by the production function and the input prices (wage rate) and (rental cost of capital) are constant. The objective of this firm is to minimize the total cost for each level of production. Suppose that the prescribed output level is and select the least-cost input combination from the following possibilities A. B. C. D. E. Question 10 The technology matrix for a three-sector economy is It is hoped to produce an output vector to satisfy final demands of How much must be produced in each sector to achieve this? A. B. C. D. E. MULTIPLE CHOICE QUESTIONS END HERE Short Answer Questions (see next page) Please answer all questions. Question 1 [20 marks] What is false in the following reasoning? “The use of language in economics can be very confusing because the economic logic itself is subtle. A case in point is profit maximization and cost minimization. One cannot exist without the other. We all know that profit maximization implies cost minimization. What may not be as obvious is that cost minimization also implies profit maximization. This explains why economists’ advice to the real world managers that they should be concerned only with cost minimization if they want to maximize profits.” Please note carefully this question is about what is false, not about what is correct. Part A. Clear identification of what is false in the reasoning [10 marks] Part B. Justification of choice of sentences in Part A [10 marks] Question 2 [20 marks] This question refers to a hypothetical social drinker –called Carlota– who goes to a pub every evening. It is assumed that she is willing to select her weekly consumption of two products beer () and wine () so as to maximize her satisfaction. Carlota has not been able to describe her utility function with a specific formula, but after carefully introspection, she has been able to draw three indifference curves (shown in Figure 1) on which to base her choice of (number of glasses of beer per week) and (number of glasses of wine per week). Carlota needs to sort out what happens with her satisfaction in two different situations. Situation 1 Last week Carlota spent on social drinking in a North Wollongong pub where she paid for each glass of beer and for each glass of wine. Situation 2 This Monday, Carlota found another pub in the North Beach where one glass of beer cost and one glass of wine. She is planning to take advantage of this finding and reduce her spending on social drinking to just per week, even though this could reduce her maximum level of satisfaction. Figure 1 Part A [10 marks] What is the solution to her optimization problem in Situation 1? [2 marks] Explain carefully. [8 marks] Part B [10 marks] What is the maximum level of satisfaction she would
Answered Same DayJun 22, 2021

Answer To: PRACTICE QUESTIONS FOR THE FINAL EXAMINATION Questions 1 and 2 refer to the following information. A...

Rajeswari answered on Jun 23 2021
147 Votes
Faculty of Business
School of Accounting, Economics and Finance
    
    Student to complete:
    
    
    Family name
    
    
    Other names
    
    
    Student number
    
    
    Table number
    
ECON 222
Mathematics for Business
Wollongong Campus
Exam Book Final Examination
Autumn 2021
    
    
    Total Number of Que
stions:
Part I: Multiple-choice Questions
Each question is of equal value (6 marks each)
No penalty is incurred for an incorrect answer.
    Twelve (12) questions
Ten (10) questions
    
Part II: Short-answer Questions
Each question is of equal value (20 marks each)
    
Two (2) questions
This examination will be marked out of 100 and represents fifty (50) per cent of the Total Assessment
    
PART I: MULTIPLE-CHOICE QUESTIONS
Questions 1 and 2 refer to a consumer whose equilibrium happens when she maximizes her utility subject to her budget constraint. The consumer loves fast food decides how many pizzas (Product X) and burritos (Product Y) to eat per month based on the following utility function:
where is the quantity consumed of pizzas per month and is the quantity consumed of burritos per month.
Question 1    
Initially, the price per pizza is and the price of one burrito, denoted by , is also Furthermore, the monthly consumer’s income, denoted by , is $100.00. The best affordable bundle is
A.
B.
C.
D.
E.
Answer is option 1. i.e (10,0)
Question 2    
Inflation engenders a new situation where prices and income have doubled, that is,
What is the best affordable bundle in this new situation?
A. A corner solution
B. An interior solution
C.
D.
E.
Answer is option A (a corner solution)
Questions 3 and 4 refer to a profit-maximizing price-taking firm in both its input and output markets. The firm produces a single output according to the production function
Question 3
In the initial situation, labour is paid an hourly wage rate and the hourly rental cost of capital is . The firm sells its product at a price per unit of output . Which of the following is true?
A. The Hessian determinant evaluated at the profit-maximizing input combination is
B. The profit-maximizing input combination is
C. The marginal physical product of labour is
D. The most profitable output level is
E. The value of the marginal physical product of labour is
Option A is right.
Question 4
Inflation engenders a situation where all the prices have doubled. As a result, , , What is the profit-maximizing input combination in this new situation?
A.
B. A corner solution
C.
D. Prices are too high for the firm to be profitable
E. Inflation distorts relative prices
Option A is right.
Question 5
The cross partials of the function
are
A.
B.     
C.
D.         
E.
Option D is correct
Question 6
The technology employed by a price-taking firm in both its input and output markets is described by the production function
The firm is currently using the input combination
Which of the following options is not true?
A. The firm is experiencing diminishing...
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