exam_one_f08

exam_one_f08 - Coee Bean on the vertical axis, plot Uncle...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Exam 1 Econ 100A, Fall 2008 Thomas Koch Write your name here: This test consists of two sections—15 multiple choice questions worth 1 point each, and a short-answer section worth 10 points. Fill out your Scantron with your name, perm number and test form. Partial credit will be awarded for the short answer section, so show all work . The points available per short-answer question are indicated at the beginning of each question. 1
Background image of page 1

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

View Full DocumentRight Arrow Icon
Part I: Short Answer Question 1 You are buying holiday gifts for your weird Uncle Milt. In particular, you will be buying him gift certificates to Starbucks and Coffee Bean. He likes to spend money at these two stores as if they are perfect complements. That is, his preferences can be expressed by the utility function: u coffee ( x ST ,x CB ) = min { x ST ,x CB } , where x ST is money spent at Starbucks, and x CB is money spent at Coffee Bean. 2 points With gift certificate value for Starbucks on the horizontal axis, and that for
Background image of page 2
Background image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Coee Bean on the vertical axis, plot Uncle Milts indierence curves for coee. 2 points What mathematical relationship between x ST and x CB must hold for Uncle Milt to be optimizing his choice of coee? 2 Question 2 Your weird Uncle Milt has grown unhappy with Starbucks. Because of this, he wants to spend (exactly) twice as much money at Coee Bean as at Starbucks. 2 points Draw his new indierence curves, with Starbucks coee on the horizontal axis, and Coee Bean coee on the vertical axis. 2 points What mathematical relationship between x ST and x CB must hold for Uncle Milt to be optimizing his consumption of coee? 2 points What is one possible utility function that represents Milts new preferences for coee? 3...
View Full Document

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.

Page1 / 3

exam_one_f08 - Coee Bean on the vertical axis, plot Uncle...

This preview shows document pages 1 - 3. Sign up to view the full document.

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