Department

EconomicsCourse Code

ECON 132Professor

Richard CarsonStudy Guide

MidtermThis

**preview**shows pages 1-3. to view the full**9 pages of the document.**Econ 132 - Problem Set 1 - Spring 2017

DUE: Tuesday, April 25th, 2017

1 Conversions

a. How many million British Thermal Units (MMBtu) are in 642 thousand cubic feet

(642 Mcf) of natural gas?

642 Mcf Ã—1.035 MMBtu

Mcf =664.7 MMBtu

b. How many million British Thermal Units (MMBtu) are in 16,000 pounds of coal?

16,000 pounds Ã—1short ton

2,000 pounds Ã—25.0MMBtu

1short ton =200 MMBtu

c. How many million British Thermal Units (MMBtu) are in 42 blue barrels of oil?

42 bbl Ã—5.8MMBtu

bbl =243.6 MMBtu

d. How many short tons of coal are equivalent in energy to 150 barrels of oil?

150 bbl Ã—5.8MMBtu

bbl Ã—1short ton

25 MMBtu =34.8 short tons

e. How many blue barrels (bbl) of oil are equivalent in heat energy content to 6 million cubic

feet (MMcf) of natural gas?

6MMcf Ã—1000 MCF

1MMcf Ã—1.035 MMBtu

Mcf Ã—1bbl

5.8MMBtu =1070.7 bbl

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2 Thermal Eï¬ƒciency

a. The Sundance Generating Station in Pinal County, Arizona uses 5,250 Btu of energy to

generate each kilowatt hour of electricity. Find its thermal eï¬ƒciency (round and express

as a percentage with no decimal point).

3,412 Btu/kWh

5,250 Btu/kWh = 0.65 â‡’65%

b. Momâ€™s Friendly Generating Station in Syracuse, NY has a thermal eï¬ƒciency of 37%. How

many million cubic feet (MMcf) of natural gas are needed to generate 350 megawatt hours

of electricity?

350 MWh Ã—1,000 kWh

MWh Ã—3,412 Btu/kWh

0.37 Ã—1MMBtu

1,000,000 Btu Ã—1Mcf

1.035 MMBtu Ã—1MMcf

1000 Mcf

=3.1 MMcf

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3 Elasticities

a. (Point Elasticity) Find the point elasticity of a consumer with demand for gasoline given

by the function q= 75 âˆ’5pâˆ’0.5p2when the price is $3.00 per gallon.

Ç«point =

dQ

Q

dp

p

=dQ

dp Ã—p

Q

p= $3

Q(p) = 75 âˆ’5pâˆ’0.5p2

Q(3) = 75 âˆ’5âˆ—3âˆ’0.5âˆ—9

= 55.5

dQ

dp =âˆ’5âˆ’p

=âˆ’8

Ç«point =âˆ’8âˆ—3

55.5

=âˆ’0.432

b. (Arc Elasticity) Find the arc elasticity of a consumer who uses 14 gallons of gasoline per

week when the price is $3.25 per gallon, and 16 gallons of gasoline per week when the price

is $2.50 per gallon.

Ç«arc =Q2âˆ’Q1

0.5(Q1+Q2)î€ŽP2âˆ’P1

0.5(P1+P2)

=16 âˆ’14

0.5(16 + 14) î€Ž2.50 âˆ’3.25

0.5(3.25 + 2.50)

= 0.1333/(âˆ’0.26)

=âˆ’0.51

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