practice_exam - Multiple Choice 1. Which statement is true?...

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Page 1 of 3 Multiple Choice 1. Which statement is true? a. A Giffen good is a normal good. b. A Giffen good may or may not be a normal good. c. An inferior good is a Giffen good. d. A Giffen good is an inferior good. e. None of the above. 2. Which of the following is NOT a monotonic transformation of 12 Ux x = for 0, 0 xx >> . a. 2 VU = b. 2 = c. 10 =− d. 3 = e. All of the above (a, b, c, d) are monotonic transformations 3. The utility function for a consumer is given by () Uf x x =+ . At the initial optimal bundle the consumer buys 5 units of 1 x and 2 units of 2 x . After a change in circumstances the new optimal bundle has 1 5 x = and 2 5 x = . After the change in consumption, relative to the initial consumption bundle, the 21 x x MRS will a. increase b. decrease c. stay the same d. it is not possible to tell with the given information e. none of the above 4. A consumer’s utility function is Uxz . If the budget constraint has a slope (/ x z p p ) = -2, which statement is true?
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This note was uploaded on 02/16/2010 for the course ECOS Economics taught by Professor None during the One '09 term at University of Sydney.

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practice_exam - Multiple Choice 1. Which statement is true?...

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