prelim1spring05breview06 - Talia Bar Econ313-1 Prelim 1...

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Econ313-1 Prelim 1 Solve questions 1 and 2 in one blue book. Use a separate blue book to solve questions 3 and 4, and then write your f nal answers to questions 3 and 4 on the exam form. You must hand in the blue book with your work in addition to your answers on the exam form. You have about 65 minutes for this exam. There are 100 points in all. Allocate your time wisely (you may want to use about 6 minutes per 10 points). The questions are not ordered by di culty or length. There are a few di f erent versions of the exam so do not worry if you talk to your friends after the exam and f nd that you have di f erent answers. When time is up, you must stop writing immediately. Question 1. (30) An individual has $60. The price of good x 1 is p 1 =$ 1 4 and the price of the composite consumption good x 2 is p 2 =$1 per unit. The individual’s utility is: u ( x 1 ,x 2 )=2 x 1 + x 2 (a) Draw the budget constraint for this individual. (b) Find the individual’s optimal choice. (c) Suppose the individual receives a monetary gift
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This test prep was uploaded on 02/23/2008 for the course ECON 3130 taught by Professor Masson during the Spring '06 term at Cornell University (Engineering School).

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prelim1spring05breview06 - Talia Bar Econ313-1 Prelim 1...

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