Mid-Termv2 - IZ MI R U N I V E R S I T Y O F E C O N O M I...

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Unformatted text preview: IZ MI R U N I V E R S I T Y O F E C O N O M I C S Econ 201 - Microeconomics Name: Midterm - 16 December 2008 Student No: Assist. Prof. Efe Postalc─▒ Answer the following 3 multiple choice questions and 2 essay questions. Show all your calculations for the essay question. You have 100 minutes. PART I: Multiple Choice Questions (each 10 points). 1. Your budget constraint for the two goods A and B is 12 A + 4 B = I , where I is your income. You are currently consuming more than 27 units of B. In order to get 3 more units of A, how many units of B would you have to give up? (a) 0.33 (b) 0.11 (c) 3 (d) 9 (e) None of the above. 2. Joe Bobs cousin Peter consumes goods 1 and 2. Peter thinks that 4 units of good 1 is always a perfect substitute for 2 units of good 2. Which of the following utility functions is the only one that would not represent Peters preferences? (a) U ( x 1 ,x 2 ) = min { 2 x 1 , 4 x 2 } ....
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This note was uploaded on 05/05/2010 for the course ECONMOICS ECON 203 taught by Professor Josephpetry during the Spring '10 term at University of Illinois, Urbana Champaign.

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Mid-Termv2 - IZ MI R U N I V E R S I T Y O F E C O N O M I...

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