prelim2bspring05 - Talia Bar Econ313-1 Spring 2005 Prelim 2...

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Talia Bar Econ313-1 Spring 2005 Prelim 2 Solve questions 1 and 2 in one blue book. Use a separate blue book to solve questions 3 and 4. 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 may be 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. Do not turn this page until you are told to start the exam. 1
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Question 1 (Consumer theory) (30) A consumer has a utility function u ( x, y )= x +ln( y 2 ) The consumer maximizes utility subject to a budget constraint. Prices are p x =1 ,p y > 0 , and income is m> 0 . a. Write the consumer’s utility maximization problem. b. Find the consumer’s demand as a function of m and p y . c. De f ne what an Engel curve is and graph an Engel curve for each good based on the demand you found in part b.
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prelim2bspring05 - Talia Bar Econ313-1 Spring 2005 Prelim 2...

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