100bmid1W10(VerA)

100bmid1W10(VerA) - Econ 100B (Grossman)Winter 2010 Midterm...

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Econ 100B (Grossman)—Winter 2010 Midterm 1—Version A January 26, 2010 Instructions: This is a closed-book, closed-notes exam. No calculators or electronic devices are allowed. Please turn off and put away all phones and other electronic devices. Write your name, perm number, version (A,B,C, or D), and your TA’s name on both your Scantron sheet and your bluebook. There are 10 multiple-choice questions and two blue-book questions. Answer as many as you can in the time allowed. I do not expect everyone to be able to answer all questions. If you get stuck on something, I suggest moving on and coming back later when/if you have time. If you have a question, please raise your hand. Good luck! Multiple choice – 30 out of 50 points (10 questions, 3 points each) 1. Simba’s demand curve for good x is x = 100 - 2 p . What is the price-elasticity of demand when p = 40? (a) 2 (b) -4 (c) -1/2 (d) 4 2. Emmon has $64. He walks into a casino and sees the menu of bets available to him. If his utility over wealth is given by U ( c ) = p ( c ) , which of these choices will maximize his expected utility? (a) Pay all his money ($64) for a 30% chance to win back $400 (b) Flip a (fair) coin. Heads win $36; tails lose $15 (c) Pay all his money ($64) for a 70% chance to win $100 (d) Reject all of the above gambles (and keep his $64)
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100bmid1W10(VerA) - Econ 100B (Grossman)Winter 2010 Midterm...

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