2009ps2

2009ps2 - BUAD 351 - Economic Analysis for Business...

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BUAD 351 - Economic Analysis for Business Decisions Homework 2 due: Thu 02/12/2009 PART (i): multiple choice please provide the answers in the following box: question answer 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1. A marginal rate of substitution formula tells us a. The rate at which the consumer is willing to exchange one good for another, given the level of utility b. The rate at which the consumer is willing to exchange one good for another, given the amounts consumed c. The rate at which the consumer is willing to exchange one good for another, given the d. The rate at which the consumer is willing to exchange one good for another, given the prices of the goods U ( C;M ) = C + 3 p M , where C is liters of Coke and M is liters Dew. a. 72 b. 17 c. 35 d. none of the above 3. Teresa consumes both steak and lobster. Suppose the formula for her indi±erence curves is S = U 1 : 5 L , where S stands for the number of steaks, L stands for the number of lobsters and U represents utility. Which of the following bundles would Teresa prefer? a. 10 steaks and 4 lobsters b. 9 steaks and 5 lobsters c. 12 steaks and 2 lobsters d. There is not enough information to answer the question 1
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4. If everyone in an economy buys and sells goods at market-wide prices (and everybody consumes positive quantities of everything) will be the same b. People who choose to buy will pay the same prices, but will have di/erent marginal rates of substitution c. People who choose to buy will pay di/erent prices, but will have the same marginal rates of
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2009ps2 - BUAD 351 - Economic Analysis for Business...

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