2021/12/9 下午4:00 Quiz: Final Exam Final ExamYou started this quiz near when it was due, so you won't  have the full amount of time to take the quiz. Started: Dec 9 at 4pm  Quiz Instructions https://canvas.eee.uci.edu/courses/40943/quizzes/199694/take 1/10 2021/12/9 下午4:00 Quiz: Final Exam  You started this quiz near when it was due, so you won't have the full amount of time to take the quiz. https://canvas.eee.uci.edu/courses/40943/quizzes/199694/take  2/10 2021/12/9 下午4:00 Quiz: Final Exam  You started this quiz near when it was due, so you won't have the full amount of time to take the quiz. Question 1 https://canvas.eee.uci.edu/courses/40943/quizzes/199694/take  20 pts 3/10 2021/12/9 下午4:00 Quiz: Final Exam You started this quiz near when it was due, so you won't have the full amount of time to take the quiz.  Edit 12pt View Insert Format Tools  Table Paragraph p Question 2 https://canvas.eee.uci.edu/courses/40943/quizzes/199694/take 0 words 15 pts 4/10 2021/12/9 下午4:00 Quiz: Final Exam You started this quiz near when it was due, so you won't have the full amount of time to take the quiz.  Edit 12pt View Insert Format Tools  Table Paragraph p Question 3 https://canvas.eee.uci.edu/courses/40943/quizzes/199694/take 0 words 15 pts 5/10 2021/12/9 下午4:00 Quiz: Final Exam You started this quiz near when it was due, so you won't have the full amount of time to take the quiz.  Edit 12pt View Insert Format Tools  Table Paragraph p Question 4 https://canvas.eee.uci.edu/courses/40943/quizzes/199694/take 0 words 10 pts 6/10 2021/12/9 下午4:00 Quiz: Final Exam You started this quiz near when it was due, so you won't have the full amount of time to take the quiz.  Edit 12pt View Insert Format Tools  Table Paragraph p Question 5 https://canvas.eee.uci.edu/courses/40943/quizzes/199694/take 0 words 15 pts 7/10 2021/12/9 下午4:00 Quiz: Final Exam You started this quiz near when it was due, so you won't have the full amount of time to take the quiz.  Edit 12pt View Insert Format Tools  Table Paragraph https://canvas.eee.uci.edu/courses/40943/quizzes/199694/take 8/10 2021/12/9 下午4:00 Quiz: Final Exam  You started this quiz near when it was due, so you won't have the full amount of time to take the quiz. p Question 6 https://canvas.eee.uci.edu/courses/40943/quizzes/199694/take 0 words  15 pts 9/10 2021/12/9 下午4:00 Quiz: Final Exam  You started this quiz near when it was due, so you won't have the full amount of time to take the quiz. Not saved https://canvas.eee.uci.edu/courses/40943/quizzes/199694/take  Submit Quiz 10/10 2) You consume different amounts of avocadoes and oranges. Assume that A = quantity of avocadoes consumed, and that () = quantity of oranges consumed. Your utility function is given as: - U(A,O) = A0.500.5 a. (5) If the price of an avocado is $1, the price of an orange is $0.5, and that your income is $50, how many avocadoes and how many oranges should you purchase? b. (5) How are the quantities calculated in (a) above affected when the price of an orange increases from $0.5 to $1? Calculate the substitution and income effects for oranges? C. (5) Is an orange a normal good or an inferior good? Explain. Question 1 20 pts 1) A private firm is giving consideration to building a new road across town. The road would cost $1.8 million to build and nothing to maintain. The following equation shows the demand over the lifetime of the road: Q = 600-100P where Q is in thousands. a) b) c) (5 pts) Calculate the maximum profit the private firm would earn if it were to build the new road. Should the private firm build the new road? (5 pts) What would be the efficient level of output? Explain. (5 pts) What if the government were to build the new road, what price should it charge? (5 pts) Should the government build the new road? Explain. d) Edit View Insert Format Tools Table 12pt Paragraph Β Ι Ο А 2 Tav O words 3) Suppose that a monopoly can produce any level of output it wishes at a constant marginal (and average) cost of $6 per unit. Assume the monopoly sells its goods in two different markets separated by some distance. The demand curves in the two separated markets are given by Q = 24-P 2. = 24 – 2P, a. (5) If the monopolist can maintain the separation between the two markets, what level of output should be produced in each market, and what price will prevail in each market. What are total profits in this situation? b. (5) How would your answer change if the firm was forced to follow a single price policy? c. (5) Suppose that the firm could adopt a two-part tariff, what pricing policy should the firm follow in order to maximize profit? How do the profits of the firm compare to the profits arrived at in part (a) and part (b) above? Edit View Insert Format Tools Table 12pt Paragraph B I U A & в T²v : р O words < Question 4 10 pts 4) (10) Suppose that you are choosing between two investment opportunities. The two investments payoffs and probabilities are as given in the table below: Outcome 1 Probability Payoff ($) 0.5 1,050 0.99 755 Outcome 2 Probability Payoff ($) 0.5 550 0.01 255 Investment A Investment B Which investment opportunity will you choose? Explain. Edit View Insert Format Tools Table 12pt Paragraph B В I U A 2 Tv : р . O words < ...! Question 5 15 pts 5) The market for pizza is competitive and the demand schedule for pizza is as follows: Price Quantity Demanded $1 1,200 pizzas 2 1,100 3 1,000 4 900 5 800 6 700 7 600 8 500 9 400 10 300 11 200 12 100 13 0 Each firm has a fixed cost of $9 and marginal cost is shown in the table below: Quantity Marginal Cost 1 pizza $2 2 4 3 6 4 8 5 6 12 10 a) (5) If the price of a pizza is $9, how many pizzas will be produced and sold in the market? How many pizzas will each firm produce? How many firms are there in the market for pizza? How much profit does each firm make? Explain. b) (5) Is the situation in part a) a long-run equilibrium? Explain. c) (5) How much profit will each firm earn in the long run? What will the market price be in the long-run? How many pizzas will each firm produce in the long-run? How many pizzas will be sold in the market in the long-run? How many firms are there in the market in the long-run? Explain. Edit View Insert Format Tools Table 12nt Paragranh . A D T2 Question 6 15 pts 6) The city of Newport Beach wants to build an observatory. The observatory has a fixed cost of $2,400,000 and no variable costs. Newport Beach has a population of 100,000, and each resident's demand for the observatory visits is given by: Qp = 10 - P, where P is the price of admission. The city is proposing a one-time $24 tax per resident to finance the construction of the observatory and admission for the city's residents will be free. a) (5) Calculate the net benefit that each resident will get from visiting the observatory? Explain. b) (5) Opponents of the city's proposal say that the financing of the observatory should be collected through charging an admission fee. What is the lowest price the observatory can charge without losing money? Explain. c) (5) If the observatory charges the lowest price you found in part b) as admission fee, are the residents better off or worse off with the admission fee as compared to the city's proposal of charging a one-time tax of $24? Explain. Edit View Insert Format Tools Table 12pt Paragraph Β Ι Ο А T²v : р 0 O words
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