ADMS 4900 Lecture Notes - Lecture 7: Deadweight Loss, Utility, Demand Curve
30 Nov 2017
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Review materials for final exam with some solutions included. Note: the final exam covers chapters 14, 19, 20, 21, 22, 23. To prepare for the exam, you should study lecture slides and notes, read required reading from the textbook, work on assigned exercises, and follow the following review materials closely. Chapter 14 consumer"s surplus (required textbook reading: pp. 254-268: exercises from textbook, exercise on p. 261: consider the linear demand curve d(p)=20-2p. When the price changes from (cid:884) to (cid:885), what is the associated change in consumer"s surplus? (15: exercise on p. 263: suppose that a consumer has a utility function u(x1, x2)=(cid:1876)(cid:2869)(cid:3117)(cid:3118)(cid:1876)(cid:2870)(cid:3117)(cid:3118). He originally faces prices (1, 1) and has income 100. Then the price of good 1 increases to: what are the compensating and equivalent variations? (note: demand functions for this cobb-douglas utility function are: x1=m/2p1; x2=m/2p2. , review questions from textbook (pp. 1. a good can be produced in a competitive industry at a cost of per unit.
