100A Mid1A SP06 - Microeconomics ECO 100A Spring 2006 Dr...

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Microeconomics, ECO 100A, Spring 2006, Dr. Famulari Midterm 1A: 250 points total You must show your work to get credit for your answers . Name_______________________________________Student ID_________________________ Question 1 (45 points total). A consumer is asked to rank order the following commodity bundles: X Y Bundle A 4 3 Bundle B 5 4 Bundle C 3 5 1A. (30 points) For an economist to represent the consumer’s preferences with a utility function, what three conditions MUST hold? Explain each condition carefully. 1B. (15 points) You are told that X and Y are goods for the consumer. Given this information, how must the consumer rank order bundles A, B, and C? Explain carefully (note: if you can not determine, be sure to explain why)
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Question 2. (30 points total) Suppose Matt has $6 each week that he can spend on balls and candy bars. Balls cost $3 each while candy bars costs $1. 2A. (10 points) Illustrate Matt’s budget constraint on the graph below.
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100A Mid1A SP06 - Microeconomics ECO 100A Spring 2006 Dr...

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