经济学原理练习题 2.pdf

ECO1503 Principles of Economics Fall 2009 ASSIGNMENT 2 Distributed on Tuesday October 13 2009 Due Date 1 00 pm Tuesday October 27 2009 Question 1 10 marks In a recent fare war WestJet reduced the price of its one way airfare from Vancouver to Winnipeg from 198 to 138 to match Air Canada WestJet matched the fare reluctantly saying it would cost the company millions of dollars in revenue for those tickets to be sold for less Air Canada on the other hand believed the fare cut would increase its revenue even if rival airlines matched the lower fares What different assumptions about the underlying price elasticity of demand for airline tickets on that route did each airline believe true Question 2 10 marks Based upon the following estimates of price elasticity of demand which markets are the best markets to tax if the government s goal is to raise tax revenue Why Product Price Elasticity of Demand Gasoline 0 8 Paper towels 2 2 Strawberries 1 5 Alcohol 0 6 Yachts 3 2 Penalties for late submissions Up to 30 minutes 25 of total awarded marks Up to 60 minutes 50 of total awarded marks Over 60 minutes 100 of total awarded marks ECO1503 Fall 2009 Assignment 2 1 Question 3 10 marks Use the law of diminishing marginal utility to explain why a pizza parlour might price pizzas in the following way Buy one pizza for 12 get the second pizza for 6 Why not simply charge 9 per pizza instead Question 4 20 marks Refer to the figure below and answer the following questions a Identify the areas of consumer and producer surplus when the market price equals 20 b Identify the areas of consumer and producer surplus when a price floor equal to 30 is imposed c Identify the deadweight loss in the above diagram when a price floor equal to 30 is imposed d Identify the areas of consumer and producer surplus when a price ceiling equal to 10 is imposed e Identify the deadweight loss in the above diagram when a price ceiling equal to 10 is imposed ECO1503 Fall 2009 Assignment 2 2 Question 5 10 marks A one day ticket to Sea World costs 37 but a two day pass costs 42 What is the average cost per day for a one day pass For a two day pass What is the marginal cost of a second day at Sea World Why might Sea World charge such a price for a second day s entrance to the park Question 6 20 marks Complete the following table describing the short run daily costs of the Kangaroo Backpack Company Total Product Backpacks Total Fixed Cost Total Variable Cost Total Cost Average Fixed Cost Average Variable Cost Average Total Cost Marginal Cost 0 0 1 30 2 50 3 60 4 64 159 5 90 6 150 7 196 8 240 ECO1503 Fall 2009 Assignment 2 3 ECO1503 Fall 2009 Assignment 2 4 Question 7 20 marks Below are the short run average total cost schedules for three plants of different size that a firm might build to produce its product Assume that these are the only possible sizes of plants that the firm might build a What is the long run average cost schedule for the firm Show it in the second table be low Plant size X Plant size Y Plant size Z Output ATC Output ATC Output ATC 5 10 5 13 5 72 10 9 10 12 10 65 15 8 15 11 15 52 20 7 20 10 20 41 25 6 25 8 25 33 30 9 30 7 30 20 35 12 35 9 35 15 40 18 40 12 40 14 45 20 45 17 45 12 50 23 50 19 50 14 55 29 55 25 55 20 60 31 60 33 60 30 Out