2005exam - MID-YEAR EXAMINATIONS 2005 Unit: ECON200...

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MID-YEAR EXAMINATIONS 2005 Unit: ECON200 Microeconomic Analysis Date: Friday 17 June 9.20 am Time Allowed: 3 hours plus 10 minutes reading. Suggested times: 1hour for Section A and 2 hours for Section B. Total Number Section A: 10 true/false questions of Questions: 20 multiple choice questions Section B: 6 questions Instructions: This paper is Section B Section B is worth 2/3 of your examination grade. Only 4 questions are to be answered. All questions in Section B are of equal value. Answer each question in a separate book. Write your name, student number and the question attempted on the front of each book. Materials permitted: Dictionaries – Standard paper translation dictionaries may be used in this examination Calculators – Non-programmable calculators are permitted
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2 Suggestions and things to remember 1) Allocate your time in proportion to the marks for each sub-part of the question. Aim in total to spend no more than 30 minutes on each question. 2) If you fail to label diagrams adequately you will lose marks. Question 1 Suppose an individual with an income of $160 consumes two goods, x 1 and x 2 , and has a utility function ) , min( 2 1 x x 3 u = . The price of the x 1 is initially equal to $2 per unit and the price of x 2 is initially equal to $2 per unit but a tax doubles the price of good x 1 to $4 per unit while the price of good x 2 is unchanged. 15% (a) Using a fully labelled diagram, accurately draw the before and after tax budget constraints, show the indifference curves, the price consumption curve and the income consumption curve. 15% (b) On a related fully labelled diagram, show how the ordinary demand function for good x 1 is derived. 15%
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This note was uploaded on 05/30/2008 for the course ECON 200 taught by Professor Donald during the Three '05 term at Macquarie.

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2005exam - MID-YEAR EXAMINATIONS 2005 Unit: ECON200...

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