{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

econ212 practice problems1

# econ212 practice problems1 - econ 212 Practice Problems 1...

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

econ 212 Practice Problems 1. True/False Indicate whether the statement is true or false AND EXPLAIN WHY BRIEFLY. ____ 1. At the optimum, a consumer’s indifference curve must be tangent to her budget line. ____ 2. Max Gross has the utility function U ( x , y ) = max{ x , y } . If the price of x is the same as the price of y , Max will buy equal amounts of x and y . ____ 3. Clara’s utility function is U ( x , y ) = ( x + 2)( y + 1). If her consumption of both x and y are doubled, then her marginal rate of substitution between x and y remains constant. ____ 4. Charlie’s utility function is U ( x , y ) = xy 2 . His marginal rate of substitution between x and y does not change if the amount of both goods doubles. ____ 5. Ambrose’s utility function is U ( x , y ) = x + 4 y 1/2 . The price of x is \$1 and the price of y is \$2. If his income rises from \$100 to \$150, his consumption of y increases by more than 10% but less than 50%. ____ 6. Linus has utility function U ( x , y ) = x + 2 y . If the price of x is \$1 and the price of y is .50 cents then Linus must consume equal amounts of both goods in order to maximize his utility.

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

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 2

econ212 practice problems1 - econ 212 Practice Problems 1...

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

View Full Document
Ask a homework question - tutors are online