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Chapter 01 Review

Financial business

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25 views

Chapter 01 Review

Financial business

Uploaded by

Phạm Ngọc
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Question 01: Suppose at the firm have cost function follow C(q)= 130+20q

a. Calculate the Average Cost, Marginal Cost

b. If the demand function is q = 530 – 10p, how many products is produced to maximize the
profit?

Question 02: If the firm faces demand schedule p = 130-4q

And the total cost schedule TC= 120+36q + 1.2q2


What output levels, if any will

a) Maximize profit
b) Minimize cost

Question 03: Total cost function of a company A is: TC = 13q² + 3q + 2018

a. Write functions for: Fixed cost (FC), Variable cost (VC), AC, and MC

b. How many products should the company produce to maximize the profit, if the price on the
market is P=220$. Calculate the profit at that price.

Question 04: If a firm has a budget of 2504$ what combination of K and L will maximize output
given the production function Q=130K0.3L0.18 and price for K and L of 22$ per unit and 13$ per
unit respectively?

Question 05: Find the profit-maximizing output for a firm with the total cost function:

TC = 4+97q-8.5q²+1/3q3

and the total revenue function:

TR = 58q-0.5q²

Question 06: If the demand function is: p=3000 -2√𝑞

a) Find the expressions for TR and MR.


b) Calculate the marginal revenue when q=9 and give an interpretation of this result.
c) Find the optimal outputs that the total revenue is maximize?

Question 07: A firm’s demand function is given by:

P=100-4 √𝑞-3q

(a) Write down an expression for total revenue.


(b) Find an expression for a marginal revenue and find the value of marginal revenue when
q=9
(c) Use the result of part (b) to estimate the change in Total revenue when Q increases by
0.25 units from its current level of 9 units and compare this with the exact change in Total
revenue.
d). Is this true that the more the firm produces, the higher total sale revenue.

Question 08: A firm faces the total revenue schedule TR=800q-0.4q²


a. What is the marginal revenue when q=800 and q=1200. Give comment?
b. When is the total revenue at its maximum?
c. What price should the firm charge to achieve this maximum total revenue?

Question 09:
1. Explain the Law of diminishing of return. Example?
2. Compare: a per unite sales tax; a lump sum tax and a percentage profit tax? Assume that
a government want to collect the tax with the fixed amount, which kind of tax policy should
be applied?
3. Introduce the Cobb Douglas Production function? Write the formula, and explain the
meaning of the coefficient and variable?
4. What is a perpetuity? Deriving the shortcut perpetuity formulas. Deriving the PV and FV
annuity formula.
5. Discuss the concept of market equilibrium in economics. Provide an example of how
supply and demand interact to establish equilibrium price and quantity.
6. Explain the concept of elasticity of demand. Differentiate between elastic and inelastic
demand with examples from real-world goods or services.
7. Describe the concept of opportunity cost in decision-making. Provide an example of how
opportunity cost influences personal or business choices.
8. What are economies of scale? Provide examples of how economies of scale benefit
businesses or industries.
9. Compare and contrast monetary policy and fiscal policy as tools for managing economic
fluctuations. Discuss their respective impacts on inflation, unemployment, and economic
growth.

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