ps1f06.pdf

ps1f06.pdf - Economics 101, Problem Set 1 Alan C. Marco Due...

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Unformatted text preview: Economics 101, Problem Set 1 Alan C. Marco Due Wed., 9/20/06 Instructions. Due at the beginning of lecture (or beforehand in my box in the economics department). I encourage you to work in groups of 2 or 3 (NOT 4). Please turn in only one problem set for each group, with the full names of all the students on the front page. Problem sets must be neat, readable, and concise. I prefer typed. They must be stapled if they are more than one page. All answers should be explained. Starred questions are more diFcult. 1. Bill’s preferences for goods x and y are given by the following table that lists combinations of goods that make Bill equally well o¡. Units of x Units of y 16 6 12 8 8 12 4 24 (a) Graph Bill’s indi¡erence curve, with x on the horizontal axis. Assuming that the price of x is $1.00 and the price of y is $1.50, and that Bill has $24 to spend, add a budget line to the graph. (b) What combination of x and y will maximize Bill’s utility?...
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This note was uploaded on 04/26/2010 for the course ECON 101 taught by Professor Staff during the Spring '08 term at Vassar.

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