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Micro - test1 tips - Figure out what the indifference...

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Test 1 1a. Can you find the demand function for a consumer when U[x1,x2] = min[ax1,bx2]? 1b. Can you prove that what you find is in fact an equilibrium? Indifference curves, budget lines, indicate the equilibrium You are not responsible for derivation of demand for using calculus. Ex: Cobb-Douglas functions Logarithm functions, raise it to the power e, you get the same demands 2. deriving properties of the slutsly equation (not on this test) Exam takes place in: Vanier College, Room 135 , 80min test Bonus question: Suppose the utility function was U(x1,x2) = ax1 + bx2 Figure out where the consumer Equilibrium is, draw the pics, figure out what is going on
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Unformatted text preview: Figure out what the indifference curves are, a,b > 0 The differential between the textbook and the notes are important. Advice: work on the problems. Performance is based on if you can derive a problem from a scratch. i.e dont memorize. Topics: 1.Mrs + explaination of curvature of indifference curves 2. what does equilibrium really ean. 3. what is pareto optimality and associated friends. 4. properties of indifference curves? Curves untersect? 5 Budgetlines taxes and subsidies. budget lines – slope- taxes, subsidies, endowments 6. utility functions and their contours....
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