2005년 이인호 미시경제학 중간.pdf

# 2005년 이인호 미시경제학 중간.pdf - 212.201...

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212.201 Microeconomics 2005 In Ho Lee Mid-Term Examination 1. Determine whether the following statements are true or false and explain your answers in 5 lines. (a) A consumer with convex indifference curves is indifferent between two bundles of X and Y : (10 , 2) and (4 , 20) . We can conclude that the consumer prefers the bundle (7 , 11) to either of the bundles above. (b) Fruit juice sells for \$ 5 per liter and gasoline sells for \$ 1 per liter. Although we don’t know how to measure utility, we do know that if a consumer buys both goods, he gets five times as much utility from fruit juice as from gasoline. (c) Substitution effect is always negative. 2. Consider an individual with the following utility function: u ( x, y ) = log x + y. The prices of x and y are given as 1 and 2 . The individual has the income of 100 . (a) Formulate the utility maximization problem of the individual and write down the Lagrangean function based on the optimization problem.

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• Fall '16
• Hyun Hye Jung
• Microeconomics, Utility maximization problem

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