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Unformatted text preview: Microeconomics, ECO 100A, Winter 2007, Dr. Famulari Midterm 1A: 250 points total Name_______________________________________Student ID_________________________ You must show your work to get credit for your answers Question 1: 55 points Question 2: 30 points Question 3: 30 points Question 4: 85 points Question 5: 50 points Total: 250 points Question 1 (55 points total). Suppose I only consume two commodities, X and Y, and I am asked to rank order the following commodity bundles: X Y Bundle A 7 6 Bundle B 8 4 Bundle C 9 2 1A. (30 points) For an economist to represent my preferences with a utility function, what TWO conditions MUST hold? Explain each condition carefully. 1B. (10 points) Suppose I tell you that I rank the commodity bundles above as follows: A~B and C>A and C>B. Using indifference curves, illustrate the commodity bundles and my preferences over them in the graph below. Y |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__ |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__ |__|__|__|__|__|__|__|__|__|__|__|__|__|__|__...
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