ECON 251 EXAM 3 – PURDUE QUESTIONS WITH 100% VERIFIED SOLUTIONS

ECON 251 EXAM 3 – PURDUE QUESTIONS WITH 100% VERIFIED SOLUTIONS P<AVC - ANSWER -shut down TR - ANSWER –PxQ Max profit - ANSWER -MR = MC substitution effect - ANSWER -Px/Py effect of change in "relative price" Profit - ANSWER -Tr-Tc or (mc)(q)-TC or q(p-ATC) MPl - ANSWER -change in Q / change in L MRS (marginal rate of substitution) - ANSWER -Px/Py or slope Perfect price discrimination - ANSWER -output satisfies allocative efficiency income effect - ANSWER -"real income" - purchasing power - move to new IC APlabor - ANSWER -Q/L Marginal utility per dollar - ANSWER -Mu/p Mu= change in U/ change in Q P ( for natural) - ANSWER -MC, but MC<Atc So P<ATC Max Utility - ANSWER -MUx/Px = MUy/Py ATC - ANSWER -TC/Q or AFC + ATC AFC - ANSWER -FC/Q TC - ANSWER -FC+VC Price giffen good falls? - ANSWER -violates law of demand AVC - ANSWER -VC/Q P* - ANSWER -MR short run - ANSWER -some input is fixed