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Economics for Management Studies
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UNIVERSITY OF TORONTO SCARBOROUGH DEPARTMENT OF MANAGEMENTMGEB02 Price Theory A Mathematical Approach Sample Test2 Solution Instructor A Mazaheri Instructions This is a closed book test only Calculator is allowed You have 2 Hours Good Luck Last Name First Name ID FOR MARKERS ONLY Q1 Q2 Q3 Q4 Total Marks Earned Maximum 35 25 20 20 100 Marks Possible Page 1 of 16Answer all following 4 questionsQuestion1 35 Points Answer the following Short Questions The following two isoquants cannot represent different output levels from the same a 5 Pointsproduction function Use the graph to explain whyKA Cq Bq L SolutionAllocation B and allocation C have to produce the same amount because they both produce the similar to allocation A However that violates the efficiency requirement as allocation C uses similar amount of capital but more labor than allocation B and yet produces the same amountPage 2 of 16
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