midterms_1,_2

midterms_1,_2 - q I Exam N o I Econ 1 00A,S pring 2 008...

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-q. I Exam No. I Econ 100A, Spring 2008 Thomas Koch Wntrp YouR NAME HERE: /o /D ! Part I: Short Answer Answer each question listed below, Partial credit will be awarded, so shou all work, The points available per question are indicated at the beginning of each qucstion. Question I You are buying holiday gifts for your weird Uncle Milt. In particular, you will be buying him suits. He values suits according to a perfect complement utility function: 't I ru41(r pant t r, i o"n"t) - min { lrpo", 1, r acket}, where l:rant isthe number of pants he owns, ^nd, ,rio.,nn i. tfre number of jackets he ownsl t 2 por,nts With pants on the X-axis, and' on the Y-a:cis, plot Uncle Milt's indif- ference curves for suits. 1 z I Yh 2 poi,nts What mathematical relationship betweer! rpant and riocket must hold for Uncle Milt to be optimizing his choice of and pants? XP"'l = 'lt'chc+
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Question 2 Your weird Uncle Milt is a little bit sloppv. He is constantlv spilling soup on his suit pants and ruining.them. Because of this, for a suit to have any value for him, he must own two pairs of pants for every jacket. o 2 polnts Draw his new indiflerence curves, with pants on the X-axis, and jackets on bhe Y-axis. J**l 3 (^^tt f s \l 3 z I t> 2 poi,nts What mathematical relationship betwe€fl llpanrc ord Unclc Milt to bc optimizing his choice of suits? / p^n+ s -- L)(y",,rcl g, iX iackete must hold for tnl in tr< ,^^, Yr 2 poi,nts What is one possible utility function that represents Milt's new preferences for suits? r7 \*,1 (\1-^r ,8r^.h-€l) ; , Ll r^"n+ )
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ID: A Exam l---Econ 100A S08--Multiple Choice Multiple Choice Identify the choice that best completes the statement or answers the question. Each questioh is worth one point. Mark vour qnswer on vour Scantron. Your Scantron MUST have your name and UCSB Net ID. l. Charlie's indifference curves have the equation xa = constantf xn, where larger constants correspond to better indifference curyes. Charlie strictly prefers the bundle (9,17) to the bundle a.*-(17, 9). r11 rrl l,6(J b.J)-4*].Ai '( 1 1l! a*-(+fiQ. ts3 ,,fj l d..*-lJitftheebove. G.,z Non. of the above. 2. Charlie's utility function is U(A, B) AB, where A and B are the numbers of apples and bananas, respectively, that he consumes. If Charlie is consuming 35 apples and 175 bananas, then if we put apples on the horizontal axip and bananas on the vertical axis, the slope of his indifference curve at his current consumptionis ".r7" I 3.( .i ult< a. -36. G- A -r'16 = ;t {- -l?- W _;'"' -g ,7r -QJ \z Af e. -l/10. \r 9,(S,rs-1 : tl.f -l 3. Waldo's utility function is U(x, y)= xy. Waldo consumes 5 units of.r and 25 units ofy. t @.1 Waldo would be willing to make small exchanges ofx fory in which he would give up 5 \-/ units of x for every unit ofy he got. Waldo would be willing to trade away all of his.r fory as long as he got more than 5 units ofy for every unit ofx he gave up, Waldo likes x and y equally well so he is always willing to exchange I unit of either good for more than I unit of the other,
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This note was uploaded on 01/31/2010 for the course ECON 100A/ 100B taught by Professor Staff during the Winter '08 term at UCSB.

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midterms_1,_2 - q I Exam N o I Econ 1 00A,S pring 2 008...

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