Problem Set 2 - EC 301 Spring 2009: Problem set 2...

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EC 301, Spring 2009. Problem set 2 Page 1 of 3 EC 301 Spring 2009: Problem set 2 Assignment date: Feb 4, 2009 Due date: Feb 11, 2009 Total Points: 15 points Note: Your score will be based on your overall performance in answering all questions in this problem set. Answers to specific questions will not be individually graded. Show all logical steps in your arguments. Answers without any explanation will get zero credit. You must write your own answers. However, you are encouraged to form study groups and consult any other resources (internet, other text books, etc.). There are thirteen problems in total. Given that you have only a week’s time to turn your home works in (this is due to the short time we have before Midterm 1), you need to write the answers for only ten out of these thirteen questions. Choose any four questions from the questions based on chapter 4, any three questions from the questions based on chapter 5 and any three questions from the questions based on chapter 6. However, once you get the solution key back, you should make sure that you know how to solve all of these thirteen questions. All questions are from your text book “Microeconomics” by Bernhiem and Whinston, 1 st Edition, US version. Questions on Chapter 4 [DO ANY 4 OF THESE 5 QUESTIONS] 1. (In text 4.4) Bert enjoys both Coke and Mountain Dew. His preferences correspond to the utility function U(C,M) = C + 3 M , where C stands for liters of Coke and M stands for liters of Mountain Dew consumed in a month. How does Bert rank the following alternatives? (1) 5 liters of Coke and 4 liters of Mountain Dew, (2) 20 liters of Coke and no Mountain Dew, (3) 10 liters of Mountain Dew and no Coke, (4) 8 liters of Coke and 7 liters of Mountain Dew, (5) 1 liter of Coke and 6 liters of Mountain Dew. 2.
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This note was uploaded on 02/28/2010 for the course EC EC 202 taught by Professor Amsler during the Spring '10 term at Michigan State University.

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Problem Set 2 - EC 301 Spring 2009: Problem set 2...

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