ECO 3401 Unit 1 Practice Exam

SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. Write a cost function for the problem. Assume that the relationship is linear. 1) A cable TV company charges $25 for the basic service plus $5 for each movie channel. Let C(x) be the total cost in dollars of subscribing to cable TV, using x movie channels. 2) Marginal cost, $80; 90 items cost $8000 to produce Solve the problem. 3) Let the demand and supply functions be represented by D(p) and S(p), where p is the price in dollars. Find the equilibrium price and equilibrium quantity for the given functions. D(p) = 210,820 - 230p S(p) = 1040p 4) A shoe company will make a new type of shoe. The fixed cost for the production will be $24,000. The variable cost will be $31 per pair of shoes. The shoes will sell for $106 for each pair. What is the profit if 600 pairs are sold? 5) Regrind, Inc. regrinds used typewriter platens. The cost per platen is $2.90. The fixed cost to run the grinding machine is $480 per day. If the company sells the reground platens for $7.90, how many must be reground daily to break even? 6) Midtown Delivery Service delivers packages which cost $1.30 per package to deliver. The fixed cost to run the delivery truck is $120 per day. If the company charges $6.30 per package, how many packages must be delivered daily to break even? Write the augmented matrix for the system. Do not solve. 7) 6x + 8z = 80 -2y + 4z = 30 3x + 6y + 4z = 34 Use the indicated row operation to change the matrix. 1 1 8) Replace R2 by R1 + R2 . 2 2
20 2 -2 2 10

1 9) Replace R3 by R3 . 2 8006 0606 0026

Use the Gauss-Jordan method to solve the system of equations. 10) x - y + z = 5 x + y + z = -5 x + y - z = -11 1

Solve the problem. 11) Carney and Dobler sell auto and hazard insurance. Their sales, in dollars, for the months of July and August are given in the following matrices.
Auto July: Hazard Carney Dobler

22,000 45,000 19,000 27,000

August:

25,000 42,000 14,000 21,000

Carney Dobler

Find a matrix that gives the increase (decrease) in sales by each salesman for each type of insurance from July to August.

Use the Gauss-Jordan method to solve the system of equations. 12) 4x - 6y - z = -3 x - 2y - 6z = -8 -3x + y + z = -8 Solve the problem. 13) A company makes three chocolate candies: cherry, almond, and raisin. Matrix A gives the amount of ingredients in one batch. Matrix B gives the costs of ingredients from suppliers X and Y. What is the cost of 100 batches of each candy using ingredients from supplier Y?

A=

sugar choc 4 6 5 3 3 3 X 3 3 2 Y 2 4 2

milk 1 1 1

cherry almond raisin

B=

sugar choc milk

Find the inverse, if it exists, for the matrix. 14) 0 -1 -4 2 15) -6 0 -6 1 Solve the system of equations by using the inverse of the coefficient matrix. 16) x - y + 5z = 8 2x + z = 2 x + 5y + z = 12

Solve the problem. 17) Bob owns a watch repair shop. He has found that the cost of operating his shop is given by C(x) = 3x2 - 180x + 64, where x is the number of watches repaired. How many watches should he repair to
produce the lowest cost?

18) John owns a hotdog stand. He has found that his profit is represented by the equation P(x) = -x 2 + 10x + 30, where x is the number of hotdogs. What is the most he can earn? Solve the equation. 19) 4(1 + 2x) = 1024 Write the exponential equation in logarithmic form. 20) 53 = 125 Write the logarithmic equation in exponential form. 21) log 10,000,000 = 7 Find the simple interest. Assume a 360-day year. Round results to the nearest cent. 22) $15,091 at 6.7% for 8 months Find the compound amount for the deposit. Round to the nearest cent. 23) $7040 at 7.3% compounded semiannually for 12 years
Find the amount that should be invested now to accumulate the following amount, if the money is compounded as indicated. 24) $12,000 at 8.9% compounded semiannually for 6 years

Find the effective rate corresponding to the given nominal rate. Round results to the nearest 0.01 percentage points. 25) 15% compounded semiannually Solve the problem. 26) A small company borrows $37,000 at 6% compounded monthly. The loan is due in 9 years. How much interest will the company pay? Find the future value of the ordinary annuity. 27) R = $7,500, i = 6.1% interest compounded semiannually for 6 years 28) R = $10,000, i = 5% interest compounded quarterly for 8 years Find the future value of the annuity due. 29) R = 1300; i = 0.05; n = 12 Find the periodic payment that will render the sum. 30) S = $12,000, interest is 4% compounded annually, payments made at the end of each year for 5 years

Solve the problem. Round to the nearest cent. 31) Sandra deposits $3000 at the end of each semiannual period for 23 years at 6% interest compounded semiannually. Find the amount she will have on deposit. Solve the problem. 32) Tasha borrowed $15,000 to purchase a new car at an annual interest rate of 9.5%. She is to pay it back in equal monthly payments over a 3 year period. How much total interest will be paid over the period of the loan? Round to the nearest dollar. Find the monthly house payment necessary to amortize the following loan. 33) $106,000 at 7.9% for 15 years