PracticeQuestion2 econ 326.pdf

PracticeQuestion2 econ 326.pdf - Econ 326 Practice Question...

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Econ 326 Practice Question 2 13 January 2018 Heejeong Kim 1. Use the chain rule to find dy dx for the following (a) y = (3 x 2 - 13) 3 (b) y = (7 x 3 - 5) 9 (c) y = (16 x + 3) - 2 2. If the utility function of an individual takes the form U ( x 1 , x 2 ) = ( x 1 + 2) 2 ( x 2 + 3) 3 where U is the total utility, and x 1 and x 2 are the quantities of two commodities consumed: (a) Find the marginal utility function of each of the two commodities. (b) Find the value of the marginal utility of the first commodity when 3 units of each commodity are consumed. 3. Suppose the demand curves for two goods Q 1 , Q 2 are Q * 1 = Y 4 P 1 Q * 2 = 3 Y 4 P 2 where P 1 and P 2 are the respective prices, and Y is household income. Using partial derivatives, show that both goods have downward sloping demand curves.
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