Test Paper ECO556 1

Assignment #1 : ECO556

Due Date: 15^th April 2012 (Hand in Hard Copy During Seminar)

Answer ALL Questions:

Total Marks = 15

1.    Show the calculation for  1^st and 2^ndorder derivatives the following functions:

a)   Y = 100 + 5X ³ – 4X ² – 2X ¹

                                                                                                                                           (2 marks)

b)  TR = 2Q ² – 1/3Q ³

                                                                                                                  (2 marks)

2.  The demand curve function of a good is given by

            Q = 10 – 0.5P 

            where

            Q denotes units of output

            P denotes price

            and the total cost function is

            TC = Q ³ – 5Q ² + 16.25Q + 25

a)  Find the level of output which total revenue (TR) will be maximized.

                                                                                                                        (5 marks)

b)  Derive total profit (π) function and then find the level of output which total profit (π).

                                                                                                                       (6 marks)