CUFEExercise answerWord格式文档下载.docx
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CUFEExercise answerWord格式文档下载.docx
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a.Usethesedatatoestimatethepriceelasticityofdemandforsubwayrides.
b.Accordingtoyourestimate,whathappenstotheTransitAuthority’srevenuewhenthefarerises?
c.Whymightyourestimateoftheelasticitybeunreliable?
a.Ifquantitydemandedfallsby4.3%whenpricerisesby20%,thepriceelasticityofdemandis4.3/20=0.215,whichisfairlyinelastic.
b.Becausethedemandisinelastic,theTransitAuthority'
srevenueriseswhenthefarerises.
c.Theelasticityestimatemightbeunreliablebecauseitisonlythefirstmonthafterthefareincrease.Astimegoesby,peoplemayswitchtoothermeansoftransportationinresponsetothepriceincrease.Sotheelasticitymaybelargerinthelongrunthanitisintheshortrun.
2.Thecostofproducingstereosystemshasfallenoverthepastseveraldecades.Let’sconsidersomeimplicationsofthisfact.
a.Drawademand-and-supplydiagramtoshowtheeffectoffallingproductioncostsonthepriceandquantityofstereossold.
b.Inyourdiagram,showwhathappenstoconsumersurplusandproducersurplus.
c.Supposethesupplyofstereosisveryelastic.Whobenefitsmostfromfallingproductioncosts–consumersorproducersofstereos?
a.Theeffectoffallingproductioncostsinthemarketforstereosresultsinashifttotherightinthesupplycurve,asshowninthefigurebelow.Asaresult,theequilibriumpriceofstereosdeclinesandtheequilibriumquantityincreases.
b.ThedeclineinthepriceofstereosincreasesconsumersurplusfromareaAtoA+B+C+D,anincreaseintheamountB+C+D.Priortotheshiftinsupply,producersurpluswasareasB+E(theareaabovethesupplycurveandbelowtheprice).Aftertheshiftinsupply,producersurplusisareasE+F+G.SoproducersurpluschangesbytheamountF+G–B,whichmaybepositiveornegative.Theincreaseinquantityincreasesproducersurplus,whilethedeclineinthepricereducesproducersurplus.BecauseconsumersurplusrisesbyB+C+DandproducersurplusrisesbyF+G–B,totalsurplusrisesbyC+D+F+G.
c.Ifthesupplyofstereosisveryelastic,thentheshiftofthesupplycurvebenefitsconsumersmost.Totakethemostdramaticcase,supposethesupplycurvewerehorizontal,asshowninFigure12.Thenthereisnoproducersurplusatall.Consumerscaptureallthebenefitsoffallingproductioncosts,withconsumersurplusrisingfromareaAtoareaA+B.
1.Fourroommatesareplanningtospendtheweekendintheirhostelroomwatchingoldmovies,andtheyaredebatinghowmanytowatch.Theirwillingnesstopayforeachmovieis:
Sharon
AiBeng
HuiShin
YeeHui
FirstMovie
$7
$5
$3
$2
SecondMovie
$6
$4
$1
ThirdMovie
$0
FourthMovie
FifthMovie
a.Withinthehostelroom,istheshowingofamovieapublicgood?
Whyorwhynot?
b.Ifitcosts$8torentamovievideo,howmanyvideosshouldtheroommatesrenttomaximizetotalsurplus?
c.Iftheychoosetheoptimalnumberfrompart(b)andthensplitthecostofrentingthevideosequally,howmuchsurplusdoeseachpersonobtainfromwatchingthemovies?
a.Withinthehostelroom,theshowingofamovieisapublicgood.Noneoftheroommatescanbeexcludedfromviewingthemovie.Becauseoneroommate’sviewingdoesnotaffecttheabilityofanotherroommatetoviewthemovie,thegoodisalsonon-rivalinconsumption.
b.Theroommatesshouldrentthreemoviesbecausethevalueofthefourthfilm($6)wouldbelessthanthecost($8).
c.Thetotalcostwouldbe$8×
3=$24.Ifthecostweredividedevenlyamongtheroommates,eachwouldpay$6.Sharonvaluesthreemoviesat$18sohersurpluswouldbe$12.AiBengvaluesthreemoviesat$12sohersurpluswouldbe$6.HuiShinvaluesthreemoviesat$6,sohersurpluswouldbe$0.YeeHuivaluesthreemoviesat$3sohersurplusis-$3.Totalsurplusamongthefourroommateswouldbe$15.
Surplus
$12
-$3
1.HealthyHarry’sJuiceBarhasthefollowingcostschedules:
Q(cups)
1
2
3
4
5
6
VariableCost($)
10
25
45
70
100
135
TotalCost($)
30
40
55
75
130
165
a.Calculateaveragevariablecost,averagetotalcostandmarginalcostforeachquantity.
b.Graphallthreecurves.Whatistherelationshipbetweenthemarginalcostcurveandtheaveragetotalcostcurve?
Whatistherelationshipbetweenthemarginalcostcurveandtheaveragevariablecostcurve?
Explain.
a.Thefollowingtableshowsaveragevariablecost(AVC),averagetotalcost(ATC),andmarginalcost(MC)foreachquantity.
b.Thefigurebelowshowsthethreecurves.Themarginal-costcurveisbelowtheaverage-totalcostcurvewhenoutputislessthanfourandaveragetotalcostisdeclining.Themarginal-costcurveisabovetheaverage-total-costcurvewhenoutputisabovefourandaveragetotalcostisrising.Themarginal-costcurveliesabovetheaverage-variable-costcurve.
1.WhatcomponentsofGDP(ifany)wouldeachofthefollowingtransactionsaffect?
(a)Yourneighbourbuysanewrefrigerator.
(b)Yourunclebuysanewhouse.
(c)Thegovernmenthiresteacherstoprovidefreeeducationtothepeople.
(d)YourparentsbuyabottleofFrenchwine
(e)ASwitzerlandDrugsCompanysetupalabinSingaporefortestingdrugs
1.a.Consumptionincreasesbecausearefrigeratorisagoodpurchasedbyahousehold.
b.Investmentincreasesbecauseahouseisaninvestmentgood.
c.Governmentpurchasesincreasebecausethegovernmentspentmoneytoprovideagoodtothepublic.
d.Consumptionincreasesbecausethebottleisagoodpurchasedbyahousehold,butnetexportsdecreasebecausethebottlewasimported.
e.Investmentincreasesbecausenewstructuresandequipmentwerebuilt.
2.Belowaresomedatafromaneconomy:
Year
Priceperfootball
Quantityoffootballs
Priceperbaseball
Quantityofbaseballs
2005
$10
200
$8
2006
14
2007
350
125
(a)ComputenominalGDP,realGDP,andtheGDPdeflatorforeachyear,suing2005asthebaseyear.
(b)ComputethepercentagechangeinnominalGDP,realGDP,andtheGDPdeflatorin2006and2007fromtheprecedingyear.Foreachyear,identifythevariablethatdoesnotchange.Explaininwordswhyyouranswermakessense.
(c)Dideconomicwell-beingrisemorein2006or2007?
2.a.CalculatingnominalGDP:
2005:
($10perfootball´
200footballs)+($8perbaseball´
75baseballs)=$2,600
2006:
($14perfootball´
200footballs)+($10perbaseball´
75baseballs)=$3,550
2007:
350footballs)+($10perbaseball´
125baseballs)=$6,150
CalculatingrealGDP(baseyear2005):
2007:
350footballs)+($8perbaseball´
125baseballs)=$4,500
CalculatingtheGDPdeflator:
($200/$200)´
100=100
($3,550/$2,600)´
100=137
($6,150/$4,500)´
b.CalculatingthepercentagechangeinnominalGDP:
PercentagechangeinnominalGDPin2006=[($3,550−$2,600)/$2,600]´
100=37%.
Percentagechange
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