MidtermAns

MidtermAns - Name: -Exam #1- Solution Key Section: 9:00 K....

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
--------------------- Name: Section: 9:00 Economics 218 K. Segerson Intermediate Microeconomics Spring, 2008 Exam #1- Solution Key Part I: Multiple Choice: Circle correct answer. Each question is worth 3 points. Total points: 30. 1. The marginal rate of substitution measures (a) the rate at which a consumer can trade one good for another in the market. (b) the maximum amount of a good that a consumer is willing to give up in order to obtain one additional unit of another good. (c) the slope of the budget constraint. (d) the slope ofthe demand curve. 2. Suppose a consumer's preferences for X and Y can be represented by the function U(X,y)=5XY. This consumer would (a) view X and Y as perfect substitutes. (b) view X and Y as perfect complements. (c) view X and Y as somewhat, but not perfectly, substitutable. (d) always be indifferent between having more X and having more Y. 3. The market demand curve for a good is found by (a) vertically summing the demand curves of individuals. (b) horizontally summing the demand curves of individuals. (c) maximizing an aggregate utility function subject to an aggregate budget constraint. (d) seeing how aggregate demand changes as more consumers enter the market. 4. The snob effect makes demand (a) more elastic than it would otherwise be. (b) less elastic than it would otherwise be. (c) perfectly elastic. (d) perfectly inelastic. IAns: b I 5. A risk premium measures
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
(a) the expected utility of a risky option. (b) the expected value ofa risky option. (c) the maximum amount of money that a risk averse person will pay to avoid taking a risk. (d) the actual premium an individual has to pay for insurance.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 05/04/2008 for the course ECON 218 taught by Professor Segerson during the Spring '08 term at UConn.

Page1 / 5

MidtermAns - Name: -Exam #1- Solution Key Section: 9:00 K....

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online