Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
a a a ECOLE DES HAUTES ETUDES COMMERCIALES DE L'UNIVERSITE DE LAUSANNE P rofesseurs : a a a a a a Aurelio Mattei et a a a a Analyse e conomique: a E.-L. von Thadden a Matiere : a Session : a a a Automne 2002 a a micro economie a a a a a a a { 4 p. Dur ee: 2 heures (NB: examen sans documentation. Veuillez ecrire lisiblement s.v.p. Les r eponses illisibles ne seront pas corrig ees. Bonne chance !) Calculatrices autoris ees: TI-83 + toutes les machines avec une ligne alpha-num erique. Autumn Examination: Microeconomic Analysis Summer Semester 2002 Please write legibly. Illegible answers will not be corrected and will get 0 points. This is a closed book exam (no books or notes are allowed). Handheld calculators (TI-83 and similar machines) and dictionaries are allowed. Good luck! 1) (15 points) a) Does an individual's demand for a good increase if her income increases? Justify your answer with a graph. b) Suppose that the individual's demand for a good increases when her income increases. What can you conclude about the relationship between the price of the good and the individual's demand? 2) (15 points) a) Give a denition of short-term average costs and short-term marginal costs. b) What is the typical shape of the short-term average cost curve? Explain. c) Show the relationship between the short-term average and marginal cost curves in a graph. 3) (10 points) A farmer uses machines ( of machines is xed in the short run. and 4) L on the axes. K ) and labor (L) to grow potatoes. The stock Draw the expansion path in a diagram with K pa (20 points) A consumer's preferences are given by the following utility function: u=x+ L c Ecole des HEC. Toute reproduction strictement interdite. Suite page 2 where x is the quantity of goods consumed, and L is the number of hours of leisure. The consumer can choose the number of hours of work T (T = 24 0L ). The wage rate is 60 Fr and the price of goods consumed is 360 Fr. Wage is the only source of income for the consumer and taxed at a rate 2. Net income is, therefore: 60 T (1 0 2). a) What is the combination of hours worked and goods consumed that maximizes utility? : b) Compute the tax revenues when the tax rate is 2 = 0 25. : c) How does the tax revenue change when 2 decreases to 0 23? Interpret. Suite page 4 Analyse economique: micro economie 5) - page 3 (20 points) Monthly demand for telephone calls in a given market is given by where q q = 20 0 p is the number of calls and p is the price. The market for telephone calls is assumed to be monopolistic. Marginal and average costs of the monopolist both equal 10 Fr. a) Compute the price that maximizes the monopolist's prots. b) Consumers demand that the price equals average cost. Compute consumer's surplus. c) The pricing schedule of Swisscom consists of a xed part a variable part p (the price of calls). F (the subscription fee) and If all consumers are identical, use the results obtained in b) to compute the pricing schedule ( F; p) that maximizes Swisscom's prots (assuming that Swisscom is a monopolist). 6) pa (20 points) Julia has a money utility function where Y U (Y ) = Y is her annual income (in thousands of francs). a) Is Julia risk-averse, risk-neutral or risk-loving? Explain. b) Julia currently has a job on which she earns 25, 000 Fr per year ( Y = 25). For next year, she has the possibility of taking a job that pays 30,000 Fr. But there is a 10% chance that she will be unsuited for the job and will be dismissed. In that case, her yearly income will only be 21,600 Fr (for example, with a job at McDonald's). Will Julia take the new job? c) Suppose that Julia takes the new job, and suppose that there is insurance available that would continue to pay her 30 if she loses the job. What is the maximum amount R Julia is ready to pay for this unemployment insurance?