ECO200Y1 Midterm: ECO200Y1 Term Test 3 2017 Winter Solutions
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ECO200Y1 Full Course Notes
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There are 6 questions of unequal value: yes or no, fannie"s farm production, mickey the perfect competitor, minny the monopolist, a fancy duopoly, multiple choice. Show your work for full marks (excluding yes/no and mc questions). For each of the statements below, indicate if you agree (yes) or disagree (no). Select the best answer, keeping in mind, of course, the assumptions and models we have developed in class: here is a production function: q = min (1l, 2k). This is a fixed proportions production function in which the firm, to be efficient, must use units of capital (k) in the ratio of precisely 50% of the number of units of labour (l). A change in non-sunk fixed costs could alter the firm"s short run production decision. Sunk costs are sunk and do not affect sr decision (shut down or operate) since no effect on avc.
