2004년 이인호 미시경제학 중간midterm_201.pdf

2004년 이인호 미시경제학 중간midterm_201.pdf -...

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212.201 Microeconomics 2004 In Ho Lee Mid-Term Examination October 20, 2004 1. (25 points) Mr. and Mrs. Brauer owned their own home. There was a real estate boom in their town and the price of houses doubled. Their income and other prices stayed constant. The Brauer’s complained that ”we are being driven from our home; we can’t afford to live here any more.” (a) Draw a diagram that illustrates what happened to the Brauer’s budget constraint. (b) Could they have been made worse off by the change? Could they have been made better off? Explain why. 2. (25 points) May’s utility function is U = C + 14 D 1 / 2 - . 5( H + J ) 2 , where C is dollars spent on goods other than housecleaning, D is the number of hours per day that somebody spends cleaning her house, H is the number of hours per day May spends cleaning her house, and J is the number of hours per day May spends working at her job. All May’s income comes from her job. She can work as many hours a day as she wishes at a wage of $7 an hour.
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