Discussion2-1

Discussion2-1 - Econ 100A/Summer 09 Discussion#2 1 Miss...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ 100A/Summer 09 Discussion #2 1. Miss Muffet insists on consuming 1 unit of whey per 1 unit of curds. If the price of curds is $5 and the price of whey is $3, then if Miss Muffet's income is $m, her demand for curds will be (a) m/5. (b) 3m/5. (c) 5c+3w=m. (d) 5m. (e) m/8. Answer: (e) 2. At prices ($4,$12), Harry chooses the bundle (9,4). At the prices ($8,$4), Harry chooses the bundle (2,9). Is this behavior consistent with the WARP? (a) Yes. (b) No. (c) It depends on his income. (d) We would have to observe a third choice to be able to say. (e) None of the above. Answer: (a) 3. Bob lives in a town where he has to pay $5 per glass of wine and $3 per loaf of bread. Bob consumes 4 glasses of wine and 5 loaves of bread per day. Henri has an income of $20 per day and pays $1 per loaf of bread and $3 per glass of wine. If Henri has the same tastes as Bob and if the only thing that either of them cares about is consumption of bread and wine, (a) Bob and Henri are equally well off. (b) Bob is better off than Henri.
Background image of page 1

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

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 3

Discussion2-1 - Econ 100A/Summer 09 Discussion#2 1 Miss...

This preview shows document pages 1 - 2. Sign up to view the full document.

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