Microeconomics UE Past Papers Questions.

If the utility function of an individual consumer is U(X,Y)=(X+2)² +(Y+3)³, find:

1. The marginal utility function for each of the commodities X and Y
2. The value of the marginal utility of the first commodity when four units of each commodity are consumed.

Answer / Solution

UNSOLVED

You are given the utility function U=q₁q₂ and the budget constraint is p₁q₁+p₂q₂=y

1. Set up the Lagrangian equation for this problem
2. What are the first order conditions for a maximum
3. Solve for the equilibrium values of q₁,q₂ and 
4. Show the effect of an increase in income on the quantity of good1

Answer / Solution

UNSOLVED

Show mathematically that the criteria for profit maximization with respect to output and input levels are similar.

Answer / Solution

UNSOLVED

The cost function for a perfectly competitive firm is specified as:

1. Derive the first order condition for profit maximization of the firm expressed as p(q).
2. If the market demand is given by q(p)=9 units, how much profit(loss) would the firm make?
3. Suppose the cost function above is for a pure monopolist operating at a point where price elasticityof demand for q is equal to 2, what would be the optimal quantity of output at P =464?

Answer / Solution

UNSOLVED

What are the major determinants of the elasticity of supply of commodities?

Answer / Solution

UNSOLVED