海南大学20092010学年度第1学期《微观经济学》答案B卷) 一、Please explain the following terms:(每题5分，共50分) 1Accounting cost(page 204)Actual expenses plus depreciation charges for capital equipment. 2Accounting profit (Page 273)The difference between a firm's revenues and 3 Adverse selection(page 598)Fom of market failure resulting from asymmetric information:if insurance companies must charge a single premium because they cannot distinguish between high-risk and low-risk individuals,more high-risk individuals will insure.making it unprofitable to sell insurance. 4 Completely inelastie demand (Page 32)Consumers will buy a fixed quantity of a good regardless of its price. 5Cost-of-iving inde(page9)Ratio of the pesent cost of a typical bundle of consumer goods and services compared with the cost during a base period. 6Dominant firm (page 450)Fm with a large share of total sales that sets price to maximize taking in oaccount the supply response of smaller firms 7 Edgeworth box (Page 569)Diagram showing all possible allocations of either two goods between two people or of two inputs between two production processes. mployment and wage which that labor productivity may be affected by thewage rate. 9Second-degree price diserimimation (page 37)Practice of chaging different ices per uni for different quantitiesof the same goodorservice 10 Shirking model (page 617)Principle that workers still have an incentive to shirk if a firm pays them a market-clearing wage,because fired workers can be hired somewhere else for the same wagc
海南大学 2009-2010 学年度第 1 学期《微观经济学》答案(B 卷) 一、Please explain the following terms：（每题 5 分，共 50 分） 1 Accounting cost (page 204) Actual expenses plus depreciation charges for capita1 equipment. 2 Accounting profit (Page 273) The difference between a firm’s revenues and its costs, including accounting depreciation but excluding any opportunity costs. 3 Adverse selection (page 598) Form of market failure resu1ting from asymmetric information: if insurance companies must charge a single premium because they cannot distinguish between high-risk and low-risk individuals, more high-risk individuals will insure, making it unprofitable to sell insurance. 4 Completely inelastic demand (Page 32) Consumers will buy a fixed quantity of a good regardless of its price. 5 Cost-of-living index (page 93) Ratio of the present cost of a typical bundle of consumer goods and services compared with the cost during a base period. 6 Dominant firm (page 450) Firm with a large share of total sales that sets price to maximize profits, taking into account the supply response of smaller firms. 7 Edgeworth box (Page 569) Diagram showing all possible allocations of either two goods between two people or of two inputs between two production processes. 8 Efficiency wage theory (Page 616) Explanation for the presence of unemployment and wage discrimination which recognizes that labor productivity may be affected by the wage rate. 9 Second-degree price discrimination (page 374) Practice of charging different prices per unit for different quantities of the same good or service. 10 Shirking model (page 617) Principle that workers still have an incentive to shirk if a firm pays them a market-clearing wage, because fired workers can be hired somewhere else for the same wage
二、简答题：（共12分) 1 Four firms located at different points on a river dump various quantities of effluent into it.The effluent adversely affects the quality of swimming for homeowners who live downstream.These people can build swimming po ols to avoid swi mming in the river, can purchase filters that eliminate harmful chemicals in the material dumped in the river.As a policy advisor for a regional planning organization,how would you compare and contrast the following options for dealing with the harmful effect of the effluent: a.An equal-rate effluent fee on firms located on the river. First,one needs to know the value to homeowners of swimming in the river.This information can be difficult to obtain,because homeowners will have an incentive to overstate this value.As an upper boundary,if there are no considerations other than swimming one could use the cost of building swimming pools,either a pool for each homeowner ora public pool for all homeowners.Next.one needs to know the marginal cost ofabatement.Ifthe abatement technology is well understood,this information should be readily obtainable.If the abatement technology is not understood,an estimate based on the firms'knowledge must be used. The choice of a policy tool will depend on the marginal benefits and costs of abatement If firms are charged an equal-rate effluent fee,the firms will reduce effluents to the point where the marginal cost ofabatement is equal to the fee.If this reduction is not high enough to permit swimming.the foo could be increased.Alternatively.revenue from the fees could be used to provide swimming facilities,reducing the needor efen reduction. b.An equal standard per firm on the level of effluent that each can dump be efficient only if the policy maker has complete informa the marginal costs and benefi fits of ah ent level of the standard can be determined.Moreover,the standard will not encourage firms to reduce effluents further when new filtering technologies become available. c.A transferable effluent permit system in which the aggregate level of effluent is fixed and all firms receive identical permits. A transferable effluent permit system requires the policy maker to determine the efficient effluent standard.Once the permits are distributed and a market develops firms with a higher cost of abatement will purchase permits from firms with lower abatement costs
二、简答题：（共 12 分） 1 Four firms located at different points on a river dump various quantities of effluent into it. The effluent adversely affects the quality of swimming for homeowners who live downstream. These people can build swimming pools to avoid swimming in the river, and firms can purchase filters that eliminate harmful chemicals in the material dumped in the river. As a policy advisor for a regional planning organization, how would you compare and contrast the following options for dealing with the harmful effect of the effluent: a. An equal-rate effluent fee on firms located on the river. First, one needs to know the value to homeowners of swimming in the river. This information can be difficult to obtain, because homeowners will have an incentive to overstate this value. As an upper boundary, if there are no considerations other than swimming, one could use the cost of building swimming pools, either a pool for each homeowner or a public pool for all homeowners. Next, one needs to know the marginal cost of abatement. If the abatement technology is well understood, this information should be readily obtainable. If the abatement technology is not understood, an estimate based on the firms’ knowledge must be used. The choice of a policy tool will depend on the marginal benefits and costs of abatement. If firms are charged an equal-rate effluent fee, the firms will reduce effluents to the point where the marginal cost of abatement is equal to the fee. If this reduction is not high enough to permit swimming, the fee could be increased. Alternatively, revenue from the fees could be used to provide swimming facilities, reducing the need for effluent reduction. b. An equal standard per firm on the level of effluent that each can dump. Standards will be efficient only if the policy maker has complete information regarding the marginal costs and benefits of abatement, so that the efficient level of the standard can be determined. Moreover, the standard will not encourage firms to reduce effluents further when new filtering technologies become available. c. A transferable effluent permit system in which the aggregate level of effluent is fixed and all firms receive identical permits. A transferable effluent permit system requires the policy maker to determine the efficient effluent standard. Once the permits are distributed and a market develops, firms with a higher cost of abatement will purchase permits from firms with lower abatement costs
However.unless permits are sold initially.rather than merely distributed.no revenue will be generated for the regional organization. 三、Calculation:(每题20分，共40分) 1A monopolist can produce at a constant average (and marginal)cost of AC=MC =5.It faces a market demand curve given by Q=53-P. a.Calculate the profit-maximizing price and quantity for this monopolist.Also calculate its profits. The monopolist wants to choose quantity to maximize its profits: max元=PQ.C(Q, 元=(63.Q5Q,orm=48Q.Q. To determine the profit-maximizing quantity,set the change in t with respect to the change in Qequal to zero and solve for Q: Substitute the profit-maximizing quantity,Q=24,into the demand function to find price: 24=53-P,orP=$29. Profits are equal to π=TR.TC=(29240.(6240=$576. b.Suppose a second firm enters the market.Let Q be the output of the first firm and Q,be the output ofthe second.Market demand is now given by Q1+Q2=53-卫. Assuming that this second firm has the same costs as the first,write the profits ofeach firm as functions ofQ and Q When the firms:P=53.Q-Q2.We may write the profit functions for the two firms: π1=P9-Cg)=53-0-g)2-5g,or 1=531-Q,2-5 and 乃=P22-C(g)=(53-9-Q2-50,orm2=53Q2-Q2-qQ2-5Q2 c.Suppose (as in the Cournot model)that each firm chooses its profit-maximizing
However, unless permits are sold initially, rather than merely distributed, no revenue will be generated for the regional organization. 三、Calculation：（每题 20 分，共 40 分） 1 A monopolist can produce at a constant average (and marginal) cost of AC = MC = 5. It faces a market demand curve given by Q = 53 - P. a. Calculate the profit-maximizing price and quantity for this monopolist. Also calculate its profits. The monopolist wants to choose quantity to maximize its profits: max = PQ - C(Q), = (53 - Q)(Q) - 5Q, or = 48Q - Q 2 . To determine the profit-maximizing quantity, set the change in with respect to the change in Q equal to zero and solve for Q: d dQ Q Q = −2 + 48 = 0, or = 24. Substitute the profit-maximizing quantity, Q = 24, into the demand function to find price: 24 = 53 - P, or P = $29. Profits are equal to = TR - TC = (29)(24) - (5)(24) = $576. b. Suppose a second firm enters the market. Let Q1 be the output of the first firm and Q2 be the output of the second. Market demand is now given by Q1 + Q2 = 53 - P. Assuming that this second firm has the same costs as the first, write the profits of each firm as functions of Q1 and Q2 . When the second firm enters, price can be written as a function of the output of two firms: P = 53 - Q1 - Q2 . We may write the profit functions for the two firms: 1 = PQ1 −C Q1 ( )= 53 −Q1 − Q2 ( )Q1 − 5Q1 , or 1 1 1 2 1 2 1 = 53Q −Q −Q Q − 5Q and 2 = PQ2 −C Q2 ( )= 53− Q1 − Q2 ( )Q2 − 5Q2 , or 2 2 2 2 1 2 2 = 53Q −Q −Q Q −5Q . c.Suppose (as in the Cournot model) that each firm chooses its profit -maximizing
level of output on the assumption that its competitor's output is fixed.Find each firm's"reaction curve"(i.e.,the rule that gives its desired output in terms ofits competitor's output). Under the Cournot assumption.Firm 1treats the output of Firm2as a constant in its maximization ofprofits.Therefore,Firm 1chooses to maximizeinb with being treated as a constant.The change inwith respect to a change inis =53-2,-,-5=0mg=24-号 This equation is the reaction function for Firm 1,which generates the profit maximizing level of output,given the constant output of Firm 2.Because the problem is symmetric,the reaction function for Firm 2 is ,=24- d.Calculate the Cournot equilibrium (i.e.,the values of Q and Q2 for which both firms are doing as well as they can given their competitors'output).What are the resulting market price and profits ofeach firm? To find the levelofoutput foreach firm that woul astationary equilibrium,we solve for the values of and that satisfy both reaction functions by substituting the reaction function for Firm 2into the one for Firm 1: 8=24-(924-g)rg=16 By symmetry,Q2=16. To determine the price.substitute and into the demand equation: P=53-16-16=$21. Profits are given by m=PQ-C(Q)=元=(21(16·(616)=$256. Total profits in the industry are +=$256+$256=$512. 2 Two firms are in the chocolate market.Each can choose to go for the highend of the market (high quality)or the low end dow quality) Re sulting profits are given by the following payoff matrix:
level of output on the assumption that its competitor’s output is fixed. Find each firm’s “reaction curve” (i.e., the rule that gives its desired output in terms of its competitor’s output). Under the Cournot assumption, Firm 1 treats the output of Firm 2 as a constant in its maximization of profits. Therefore, Firm 1 chooses Q1 to maximize 1 in b with Q2 being treated as a constant. The change in 1 with respect to a change in Q1 is 1 1 1 2 1 2 53 2 5 0 24 Q 2 Q Q Q Q = − − − = , or = − . This equation is the reaction function for Firm 1, which generates the profitmaximizing level of output, given the constant output of Firm 2. Because the problem is symmetric, the reaction function for Firm 2 is Q Q 2 1 24 2 = − . d. Calculate the Cournot equilibrium (i.e., the values of Q1 and Q2 for which both firms are doing as well as they can given their competitors’ output). What are the resulting market price and profits of each firm? To find the level of output for each firm that would result in a stationary equilibrium, we solve for the values of Q1 and Q2 that satisfy both reaction functions by substituting the reaction function for Firm 2 into the one for Firm 1: Q1 = 24 − 1 2 24 − Q1 2 , or Q1 = 16. By symmetry, Q2 = 16. To determine the price, substitute Q1 and Q2 into the demand equation: P = 53 - 16 - 16 = $21. Profits are given by i = PQi - C(Qi ) = i = (21)(16) - (5)(16) = $256. Total profits in the industry are 1 + 2 = $256 +$256 = $512. 2 Two firms are in the chocolate market. Each can choose to go for the high end of the market (high quality) or the low end (low quality). Resulting profits are given by the following payoff matrix: Firm 2
Low High Firm1 Low -20-30 900,600 High 100,800 50,50 a.What outcomes,if any,are Nash equilibria? A Nash equilibrium exists when neither party has an incentive to alter its strategy taking the other's strategy as given.If Firm 2 chooses low and Firm 1 chooses High neither will have an incentive to change (100>-20 for Firm 1 and 800>50 for Firm 2).If Firm 2 chooses High and Firm 1 chooses low.neither will have an incentive to chang (Firm 1 and60>0for Firm 2).Both outomes are Nash equilibria.Bot firms choosing low is not a Nash equilibrium because,for example,if Firm 1 chooses low then firm 2 is better off by switching to high since 600 is greater than-30. b.If the managerof each firm is conservative and each follows a maximin strategy, what will be the outcome? If Firm 1 chooses Low,its worst payoff,-20.would occur if Firm 2 chooses Low.If Firm 1 chooses High,its worst payoff,50,would occur if Firm 2 chooses High.Therefore,with a onservat e maximin s strategy,Firm High.Similarly,if Firm 2chooses Low,its worst payoff,30.would occur ifFirm 1chooses Low.If Firm2 chooses High its worst payoff 50,would occur if Firm I chooses High.Therefore,with a maximin strategy,Firm 2chooses High.Thus,both firms choose High,yielding a payoff of50 for both. c.What is the cooperative outcome? The cooperative outcome woul maximize joint payoffs.This would occur if Firm 1 goes for the low end of the market and Firm 2 goes for the high end of the market.The joint payofis 1,500 (Firm 1 gets 900 and Firm 2 gets600) d.Which firm benefits most from the cooperative outcome?How much would that firm need to offer the other to persuade it to collude? Firm I benefits most from cooperation.The difference betweenits best payoffunder cooperation and the next best=800.To persuade Firm 2 to choose Firm 8 best option,Firm 1 must offer at least the difference between Firm 2s payoff under cooperation. 600,and its best payoff,800,i.e.,200.However,Firm 2 realizes that Firm 1 benefits much
Low High a. What outcomes, if any, are Nash equilibria? A Nash equilibrium exists when neither party has an incentive to alter its strategy, taking the other’s strategy as given. If Firm 2 chooses Low and Firm 1 chooses High, neither will have an incentive to change (100 > -20 for Firm 1 and 800 > 50 for Firm 2). If Firm 2 chooses High and Firm 1 chooses Low, neither will have an incentive to change (900 > 50 for Firm 1 and 600 > -30 for Firm 2). Both outcomes are Nash equilibria. Both firms choosing low is not a Nash equilibrium because, for example, if Firm 1 chooses low then firm 2 is better off by switching to high since 600 is greater than -30. b. If the managerof each firm is conservative and each follows a maximin strategy, what will be the outcome? If Firm 1 chooses Low, its worst payoff, -20, would occur if Firm 2 chooses Low. If Firm 1 chooses High, its worst payoff, 50, would occur if Firm 2 chooses High. Therefore, with a conservative maximin strategy, Firm 1 chooses High. Similarly, if Firm 2 chooses Low, its worst payoff, -30, would occur if Firm 1 chooses Low. If Firm 2 chooses High, its worst payoff, 50, would occur if Firm 1 chooses High. Therefore, with a maximin strategy, Firm 2 chooses High. Thus, both firms choose High, yielding a payoff of 50 for both. c. What is the cooperative outcome? The cooperative outcome would maximize joint payoffs. This would occur if Firm 1 goes for the low end of the market and Firm 2 goes for the high end of the market. The joint payoff is 1,500 (Firm 1 gets 900 and Firm 2 gets 600). d. Which firm benefits most from the cooperative outcome? How much would that firm need to offer the other to persuade it to collude? Firm 1 benefits most from cooperation. The difference between its best payoff under cooperation and the next best payoff is 900 - 100 = 800. To persuade Firm 2 to choose Firm 1’s best option, Firm 1 must offer at least the difference between Firm 2’s payoff under cooperation, 600, and its best payoff, 800, i.e., 200. However, Firm 2 realizes that Firm 1 benefits much -20, -30 900, 600 100, 800 50, 50 Firm 1 Low High
more from cooperation and should try to extract as much as it can from Firm 1(up to 800)
more from cooperation and should try to extract as much as it can from Firm 1 (up to 800)