Department of Economics
EC-201 A1 – Intermediate Microeconomics
Prof. Regina Celia Cati (Email: [email protected])
Problem Set #1
1) Cite some examples of economic mathematical functions (one and several variables)
2) Graph the function . Find and graph the inverse function.
3) Take the derivatives of the following functions:
4) Find the partial derivatives of the following functions:
5) Do these functions have a maximum or a minimum?
b. Demand and Supply Review (chapters 2 and 3)
1) Suppose the demand for processed pork in Canada is:
. Where is the price of beef, the price of
chicken and stands for income. Assume that (dollars per kg), (dollars
per kg), (thousand dollars) and that the price of beef rises from $4 to $5. How
does the demand curve for processed pork shift? Use a diagram to illustrate the answer.
2) Use the demand of problem 1 together with the supply curve to show how
the equilibrium quantity of pork varies with income. Use a diagram to illustrate the
3) The coconut oil demand function (Buschena and Perloff, 1991) is where Q is the
quantity of coconut oil demanded in thousands of metric tons per year, p is the price of
coconut oil in cents per pound, is the price of palm oil in cents per pound, and Y is the
income of consumers. Assume that p is initially 45￠ per pound, is 31￠ per pound, and
Q is 1,275 thousand metric tons per year. Calculate the income elasticity of demand for
coconut oil. (If you do not have all the numbers necessary to calculate numerical answers,
write your answers in terms of variables.)
4) The U.S. supply of frozen orange juice comes from Florida and Brazil. What is the effect
of a freeze that damages oranges in Florida on the price of frozen orange juice in the
United States and on the quantities of orange juice sold by Floridian and Brazilian firms?
5) Calculate the price and cross-price elasticities of demand for coconut oil. The coconut o